UPDATE 1-French prosecutor seeks end to Airbus insider trading trial

PARIS, May 11 (Reuters) - A French public prosecutor on Monday recommended that insider trading charges against current and former managers of Airbus Group be dropped after they successfully challenged the process on human rights grounds.

The recommendation, if endorsed by a judge who has the final say, would halt a trial of seven current and former managers and two former industrial shareholders accused of illegally selling shares in 2006 in what was then known as EADS, as the group faced mounting costs on the A380 and A350 aircraft projects.

"My view is that the charges should be dropped for all those concerned," said public prosecutor Eliane Houlette.

The trial opened last year but was suspended after a first day of deliberations to allow the defendants to argue before a higher court that the case infringed their basic rights because they had already been cleared of identical charges by France's AMF stock market regulator.

The result of that human rights action came in March when France's Constitutional Court backed their argument and ordered a criminal court to halt the trial in its current form. It urged the government to change the law so that people who have already been investigated and cleared by the AMF cannot go on to face a criminal trial.

The decision was seen as a setback for prosecutors and reflected a broader tug of war between the administration and French judiciary over the so-called 'double jeopardy' rule.

Scrapping the trial would wrap up more than eight years of administrative and legal wrangling caused by delays to the A380, the world's largest airliner. The judge in charge of the trial was expected to make a quick decision, possibly later on Monday.

The trial had been expected to throw the spotlight on internal strategy disputes and confidential financial discussions behind the launch of another jet, the A350.

In the firing line were the seven current and former managers, and also two corporate defendants France's Lagardere and German car firm Daimler.

Both companies were core shareholders in EADS and reduced their stakes in April 2006, weeks before the announcement of A380 production delays that hit its share price.

Both companies and all the individual defendants have denied any wrongdoing. (Reporting by Sophie Louet and Chine Labbe; writing by Tim Hepher and Brian Love; editing by Geert De Clercq)