With the proposed merger of EADS and BAE Systems facing serious opposition by the German government, which has indicated it may block the deal if its conditions are not met, EADS CEO Tom Enders is offering to negotiate further details of the transaction.

Hans-Joachim Otto, a state secretary in the Ministry of Economics and Technology, told a parliamentary hearing that “it is not a matter of how, but whether” the merger should take place. Otto said following the event that the proposed transaction will not be approved without further clarification. In his opinion, there are still many questions surrounding the plan, including the valuation of the two companies.

Enders attended the same hearing and tried to convince the members of parliament of the deal’s merits. He outlined to them that the proposed merger was a once-in-a-lifetime opportunity to create a world market leader. He tried to alleviate concerns that jobs might be lost: “What is in Germany today will stay in Germany,” he said.

One of the issues EADS is faced with is an apparent lack of talks. While the government has been openly critical of the proposal, it has not come up with concrete demands that might help alleviate its concerns.

One key issue that still could derail the deal is whether the German government will stick to its plan to buy up to 15% of EADS, the same amount that France holds. EADS and BAE Systems have offered golden shares to the U.K., France and Germany that would protect the company from a hostile takeover. Voting rights are limited to no more than 15%, and that rule is only to be changed by an 85% majority. There are additional veto rights protecting that status further.

But in the current shareholder pact, EADS core shareholders have effective control over management because they control the composition of the board of directors. Core shareholders include the French government, the Lagardère Group, the Spanish government and Daimler. The car manufacturer currently represents German interests, but wants to sell its stake. Once the shareholder pact is dissolved, Daimler could sell its stake over the stock exchange, but before the merger the German government has planned to buy it.

Otto gave no indication whether that position could still change. He said too much government influence was detrimental.

Industry sources say that Germany investing in EADS could be a deal breaker because it would be unacceptable to the British government and impair the company’s ability to compete for Pentagon business.

EADS and BAE Systems have until Oct. 10 to decide whether to go ahead with the deal or cancel it.