BERLIN (Reuters) - The supervisory board of German industrial robot maker Kuka <KU2G.DE> has given Chief Executive Till Reuter a free hand for negotiations concerning a 4.5 billion euro ($5.06 billion) takeover bid by China's Midea <000333.SZ>, sources said on Tuesday.

Kuka is the biggest German industrial technology company to be targeted by a Chinese buyer in a wave of deals over recent months, and the bid caused a stir among German politicians.

The supervisory board unanimously backed Reuter, according to two sources with knowledge of a meeting of the board on Tuesday. Reuter has welcomed the takeover bid.

The supervisory board includes Hubert Lienhard, head of engineering firm Voith and billionaire Friedhelm Loh, Kuka's two biggest shareholders, although Loh was not at Tuesday's meeting, the sources said.

Citing unnamed industry sources, the Handelsblatt business daily reported on Tuesday that the Chinese have thwarted plans by Voith to form a consortium to take control of Kuka themselves. Voith currently holds a 25.1 percent stake.

Loh, who owns German manufacturer Rittal and controls 10 percent of Kuka via his investment company Swoctem, has ruled out a counter bid saying his company was too small.

German Chancellor Angela Merkel has said she would not try to prevent a takeover but has left the door open to rival bids. However, no potential German or European counter bidder has emerged. Industrial group Siemens <SIEGn.DE> has already said it has no interest in becoming a white knight for Kuka.

(Reporting by Alexander Huebner and Irene Preisinger, writing by Emma Thomasson; Editing by Hugh Lawson)