JERUSALEM (Reuters) - A group led by mobile technology firm Emblaze Ltd (>> Emblaze Ltd.) has proposed to take control of debt-ridden IDB Group, one of Israel's biggest conglomerates, in a deal that would allow IDB Chairman Nochi Dankner to keep a stake and prevent bondholders from seizing the company.

Emblaze and holding company Netz (>> Netz Group Ltd) would inject 826 million shekels $232 million (£149.1 million) into IDB Holding Corp (>> IDB Holdings Corporation Ltd.), provided IDB first settles its obligations to its creditors, the companies said on Thursday.

Under the plan, which still needs court approval, a new company would be set up that would be 70.3 percent owned by Emblaze and 29.7 percent by Dankner.

The new company would then own 72 percent of IDB, with Netz - which is contributing 82.6 million shekels - holding 8 percent and current shareholders would own 20 percent. It would own about 50 percent of IDB Development, a unit of IDB, while IDB's creditors would receive the rest.

The plan comes after Israeli investment firm BGI (>> BGI Investments 1961 Ltd) said on Wednesday it had raised its stake in Emblaze to 20 percent and that it was negotiating to boost the holdings to 46.6 percent, which would give BGI control over Emblaze.

In turn, London-listed Emblaze would use a cash reserve of some 500 million shekels to invest in IDB.

Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels and IDB Development owes a further 5.8 billion shekels.

Bondholders of both companies - mainly institutional investors led by U.S. hedge fund York Capital - have proposed a debt restructuring that would oust Dankner and give them full control of a combined company.

Dankner, though, is fighting to keep control of IDB. He has tried to sell off assets to pay off the debt and is in talks to sell Clal Insurance (>> Clal Insurance Enterprises Holdings Ltd.).

So far, bondholders have rejected IDB's offers.

The proposed takeover deal needs approvals from the companies' stock and bondholders.

Emblaze's shares have been temporarily suspended in London. IDB's shares were up 9.6 percent in afternoon trading in Tel Aviv, with IDB's bond prices up as much as 5.7 percent. Netz's shares rose 6.6 percent and BGI's shares were 1.9 percent lower.

(Editing by Mark Trevelyan)

By Steven Scheer