PARIS (Reuters) - French magistrates are expected early this week to order a trial in a tax case involving Swiss bank UBS <UBSG.S> and a French subsidiary, a judicial source said on Sunday, after negotiations with investigators failed to produce a settlement.


French newspaper JDD said UBS had rejected a 1.1 billion euro ($1.2 billion) settlement proposed by prosecutors.


The judicial source declined to comment on the negotiations.


The JDD quoted Markus Diethelm, UBS's group general counsel, as saying a 1.1 billion euro payment was "unthinkable" and out of line with similar settlements reached in other countries.


UBS did not immediately respond to requests for comment.

The French financial prosecutor's office said last month that its investigators had finished a formal investigation of UBS and its French unit in a long-running probe into allegations the bank helped clients avoid taxes.

(Reporting by Yann Le Guernigou, Gus Trompiz and Maya Nikolaeva in Paris, Brenna Hughes Neghaiwi in Zurich; Editing by Richard Balmforth)