Asked after the ruling whether the state might seek to reclaim the deduction, SocGen lawyer Jean Veil told journalists: "I don't think it can."

"There would have to be a deliberate error, an excessive error (by the bank) and that is not what is in the ruling," he said.

The Versailles appeals court ordered Kerviel pay 1 million euros ($1.12 million) in damages to the bank following losses he made that totaled 4.9 billion euros.

Previous rulings, since struck down, had made him liable to repay the full amount.

Budget minister Christian Eckert said shortly after the decision that the government would review the ruling before taking a position on the tax deduction.

(Reporting by Chine Labbe and Emmanuel Jarry; Writing by Leigh Thomas; Editing by Andrew Callus)