* Eurex to introduce partnership programme in November
* Aimed at attracting interest rate swaps business
* Members to get share of profits, say in how Eurex run (Adds LSE, Hesse finance minister, more detail)
LONDON, Oct 9 (Reuters) - Deutsche Boerse has introduced a profit-sharing scheme on interest rate swaps at its clearing business, seeking to wrest trade from the London Stock Exchange amid the uncertainty over Britain's departure from the European Union.
The German company's Eurex Clearing business in Frankfurt said on Monday it would launch a partnership programme in November, where members will get a share of profits from clearing interest rate swaps (IRS) depending on the volume of business they provide.
The 10 most active programme participants will be eligible for a "significant" share in revenues of IRS clearing, and have a say in how Eurex is run, the clearing house said
The London Stock Exchange (LSE) declined to comment.
German politicians said the new programme would help Frankfurt in its wider battle with other EU financial centres to attract business from London ahead of Brexit.
"With the partnership programme announced today, Eurex Clearing is very clearly throwing its hat in the ring," said Thomas Schaefer, finance minister for German state of Hesse, one of Deutsche Boerse's regulators.
"Frankfurt as a financial centre will profit from this because clearing will become more attractive for German and international players," Schaefer said.
An IRS is a popular derivatives contract used by companies to insure themselves against adverse moves in borrowing costs. The clearing of IRS in Europe is dominated by the LSE's LCH unit.
"This market-led initiative will benefit clients and the broader market place through greater choice and competition, improved price transparency as well as reduced concentration risk," Eurex Clearing CEO Eric Mueller said in a statement.
A clearing house stands between two sides of a trade and is backed by a default fund to ensure a transaction is completed even if one side goes bust.
Some of Europe's biggest trading houses in swaps, Bank of America Merrill Lynch, Citi, Commerzbank, Deutsche Bank, JP Morgan and Morgan Stanley, have already registered an early interest in the programme, Eurex said.
"We welcome this market-led initiative to promote greater choice, flexibility and transparency for our global client base," said Jerome Kemp, global head of futures, clearing and collateral at Citi.
LCH roughly clears more IRS daily than Eurex has cleared in total so far, but Eurex expects volumes to increase in coming months as banks seek to "Brexit-proof" their operations.
Industry bodies backed by the big banks have warned splitting up euro clearing would force banks to set aside billions of euros in extra collateral to cover positions.
Eurex has repeatedly dismissed such estimates, and Deutsche Bank said on Monday the programme would help the market navigate the "political and regulatory" challenges it faces.
The partnership programme mimics a set-up already in use at LCH, where banks have a large minority stake in the clearing house and a strong say in its running.
The European Central Bank, and French policymakers in particular, have long wanted IRS denominated in euros to be cleared in the single currency area, saying this was necessary to ensure financial stability in market turbulence.
After Brexit, it is unclear whether market participants in the EU will still be able to use LCH in London, because the bloc has proposed a draft law that would require clearing of euro-denominated swaps to take place in the EU under certain circumstances.
Eurex's move could see France put pressure on LCH to introduce IRS clearing at its unit in Paris to avoid losing the broader Brexit race with Frankfurt.
This comes after plans for LSE and Deutsche Boerse to merge were vetoed by the EU in March because it would have created a monopoly.
LSE CEO Xavier Rolet has said that if euro clearing was forced out of London, it would likely end up in New York rather than the EU, and put up to 100,000 UK financial services jobs at risk. (Reporting by Huw Jones; Editing by Rachel Armstrong and Mark Potter)