Here the -ing form is a noun. The conditioning is NOT phonological, but rather lerxical. At least the conditioning is lexical. This question confused a lot of people. The conditioning factor is always grammatical.
Derivational endings occur in both.
My reluctance comes from the fact that the crucial point in each case is that speakers have no intuitions concerning the putative morphemes, and I would have been much happier if that point had been spelled out explicitly in the answers. Many people did not seem to understand this question. The s is sheer folk etymology. It was the regular way of spelling the velar fricative in those happy days when English had one. The change had nothing to do with French.