MILAN (Reuters) - Germany is considering introducing a law to protect domestic banks from cross-border takeovers, Italian newspaper La Repubblica reported on Sunday, as Italy's UniCredit seeks a merger with Germany's Commerzbank.

Berlin was taken aback by UniCredit's swoop to build a large stake in state-backed Commerzbank, a move the Italian bank says could lead to a merger.

The German government could follow the example of Poland which has a law preventing foreign lenders from buying 100% of any Polish bank and requires them to remain listed on the Warsaw Stock Exchange, La Repubblica said, citing a source close to the matter.

Reuters was not able to confirm La Repubblica's report.