Tata, Thyssen in talks on Europe steel joint venture -report

* Options include forming European steel JV -report

* Tata says involved in strategy talks from time to time

* Issue not arisen - Thyssenkrupp (LSE: 0O1C.L - news) supervisory board member (Adds comments from Thyssenkrupp works council chief, Tata Steel, Thyssenkrupp letter to staff)

FRANKFURT, April 13 (Reuters) - India's Tata Steel (BSE: TATASTEEL.BO - news) and Germany's Thyssenkrupp are in talks about a joint venture among the options being considered for their European steel operations, Germany's Rheinische Post said on Wednesday.

Under the model being discussed, Tata and Thyssenkrupp would each own shares in the venture proportional to the value of the businesses they were contributing, the newspaper said.

Expectations of long-awaited consolidation in Europe's battered steel industry rose after Tata Steel said two weeks ago that it plans to sell its loss-making British business.

Media reports focused on a merger of Tata's Dutch operation with Thyssenkrupp's European business and a person aware of the talks told Reuters that the two had been discussing combining their European steel operations.

Tata was also very interested in Thyssenkrupp's Brazilian CSA steel plant, Rheinische Post added.

Thyssenkrupp declined to comment on the latest report, while Tata Steel reiterated a recent statement.

"The company is from time to time involved in discussions on strategic perspectives for particular business activities. Such discussions are ongoing management tasks and we do not comment on speculation about such discussions," it said.

Thyssenkrupp's works council chief Wilhelm Segerath told Reuters that a potential merger had not been discussed by the supervisory board, of which he is a member.

"There's nothing to it. There can't be merger plans without us," he said.

Thyssenkrupp said in a letter to staff last week there was no reason to comment on reports of a deal, although consolidation "would be a step forward".

Rheinische Post said on Wednesday that an agreement between Tata Steel and Thyssenkrupp was not imminent, and that other options besides a joint venture were being discussed.

(Reporting by Maria Sheahan, Georgina Prodhan and Tom Kaeckenhoff; Editing by Greg Mahlich and Alexander Smith)