PARIS, Dec 15 (Reuters) - France's financial stability council said on Friday that it planned to set a cap on large banks' exposure to highly indebted companies after big French firms binged on cheap debt in recent years amid record low interest rates.

The High Council for Financial Stability council, which is chaired by Finance Minister Bruno Le Maire, said in a statement after a quarterly meeting that systemic banks would have to limit exposure to such firms to five percent of their capital.

The details remain to be hammered out in discussions with various European authorities, which means the measure will most likely take effect at the end of the first half of 2018.

A finance ministry source said that France would for now probably hold off on requiring banks to hold extra funds against rising risks from Jan. 1 and a formal decision would be published after talks with the European Central Bank.

So far the council has never imposed a so-called countercyclical capital buffer since it was set up in 2014. The Czech Republic, Sweden and Slovakia are the only EU countries to have decided to use them.

"The High Council considers that if cyclical risks remain at their current levels then it could be necessary to take additional preventive actions in the coming months," it said in the statement. (Reporting by Leigh Thomas; editing by Michel Rose)