Algeria is to buy a 51% stake in mobile phone operator Djezzy, a government spokesman said, after talks with the main shareholder in the group's Egyptian parent company.

Talks have been concluded with Russian telecoms firm Vimpelcom, the main shareholder in Orascom Telecom Holding of Egypt, said Zouheir Meziane, a spokesman with the telecommunications industry.

The date of the buy-out and the sum involved had not yet been agreed, Meziane added.

The deal looks like ending a dispute between the Algerian authorities and Orascom that had been raging since October 2010, when Algerian Prime Minister Ahmed Ouyahia first declared Algiers' intention to take over Djezzy.

That same month Vimpelcom signed a multi-billion dollar merger deal with Orascom owner, Egyptian billionaire Naguib Sawiris, to create the world's fifth largest mobile operator.

In November of the same year, Orascom threatened to take the matter to international arbritration.

It has also threatened legal action after Algiers hit Djezzy with a 230-million-dollar tax bill for 2008 and 2009, a period for which it insisted it had already paid taxes.

Djezzy is the largest mobile operator in Algeria, claiming with over 16 million subscribers last August. It has been operating in Algeria since 2002.