Berlin/Brussels - The European Commission said Thursday it was launching a probe into government support for Germany's embattled property lender Hypo Real Estate (HRE).

Berlin has already thrown Munich-based HRE a financial lifeline totalling more than 102 billion euros (135 billion dollars) to help it stave off collapse.

The commission's announcement same as the German Government said it had built up a 47.31 per cent stake in the loss-making HRE, which has been hit hard by the global financial crisis.

Berlin's push to tighten its grip on the Munich-based lender comes ahead of an HRE extraordinary stockholders' meeting set down for next month.

Berlin has also launched moves to shore up HRE through nationalization after the bank clocked up a 5.461-billion-euro loss for the whole of last year.

However, HRE's biggest shareholder the US investment fund JC Flowers, has rejected the government's plans.

HRE insists that it has made strides in restructuring the group, which specializes in local government and infrastructure financing.

Despite being propped up by state aid, HRE said Tuesday it had posted a first-quarter loss of 382 million euros as it battles to emerge from the global financial crisis.

This came after Munich-based HRE had reported a profit of 148 million euros during the first quarter of 2008.