AMSTERDAM, Nov 21 (Reuters) - The Dutch state will go ahead with the merger of Fortis and ABN AMRO's retail operations, while Fortis' insurance arm will be sold off separately. Former Dutch Finance Minister Gerrit Zalm will head the combined company. Following are the details of the Dutch government's plans: * By combining Fortis Bank Netherlands and ABN AMRO Bank Netherlands the government expects to create a strong national bank, which will have annual sales of about 8 billion euros ($10.02 billion). * The insurance activities will be sold eventually to the private sector before 2011. * ABN AMRO will be the leading brand name of the new bank. Brand names such as MeesPierson will also be used. * The Dutch state will restart negotiations with the European Commission regarding the sale of certain ABN AMRO activities to Deutsche Bank, after the Central Bank halted the sales process. "The sale is under the current and changed (market) circumstances to my judgement undesirable," Dutch Finance Minister Wouter Bos said in a letter to parliament. * The Dutch government will sell the bank in 2011 at the earliest. * The combination will be active in retail, private, commercial and merchant banking markets, and compete with Dutch ING, SNS Reaal, and unlisted Rabobank * The ABN AMRO Fortis combination will be headed by former Dutch Finance Minister Gerrit Zalm. Former ING executive Hessel Lindenbergh will head the board of directors.