STUTTGART, Germany (Reuters) - DaimlerChrysler has paved the way to rename itself Daimler AG by striking a deal with Ford Motor Co. to use the name now owned by British brand Jaguar, the companies said today.

Premium carmaker Jaguar acquired rights to the Daimler name in 1960 when it bought the British offshoot set up by German automotive pioneer Gottfried Daimler in 1896.

The company went on to supply Britain's royal family with luxury vehicles. Its name still appears on some high-end versions of Jaguar cars, now part of Ford's European family of premium car brands that are up for sale.

DaimlerChrysler "will now be allowed to use the name alone or in combination with other words as the title of a trading company, a trade name or a corporate name," a Ford spokesman said, citing a Ford position paper from mid-May that was not put out as a news release.

"The extended usage agreement does not, however, affect either company's existing right to use the Daimler name for a product."

The deal was put in place before DaimlerChrysler agreed in May to sell a majority stake in U.S. arm Chrysler Group to private equity company Cerberus Capital Management, the spokesman said, declining to give any financial details.

A DaimlerChrysler spokeswoman also declined to say how much the Stuttgart-based carmaker paid Ford for the Daimler rights.

DaimlerChrysler shareholders will meet on Oct. 4 to decide on changing the company's name.

The proposal has come under fire by critics in Germany who say it ignores the contribution of Carl Benz, whose early work in developing cars helped lead to the creation of Daimler-Benz AG, the group's name before it merged with Chrysler in 1998.