The sources said government officials also reassured the French group that Rome will not try to dilute its presence on the board of former phone monopoly Telecom Italia (TIM) when a slate backed by state lender CDP is presented next year.

The slate is expected to be presented by the outgoing board, the two sources close to the matter added.

Italy wants TIM, whose main shareholders are Vivendi and CDP with respective stakes of 24% and 10%, to merge its landline grid with state-backed Open Fiber, paving the way for a single ultra-fast broadband infrastructure.

Given the size of its stake, Vivendi's support could be crucial in approving any decision of an extraordinary nature at TIM's shareholder meeting.

Vivendi is a key player in Italy as it also owns 29% of top commercial broadcaster Mediaset, controlled by the family of former Italian Prime Minister Silvio Berlusconi. The two groups are embroiled in a legal battle stemming from a failed pay TV sale in 2016.

The French group complained to the European Commission this month after Rome presented a draft law that would require Italy's communications watchdog to investigate companies operating in the telecoms and media sectors.

The bill, if approved, would buy Mediaset time in its dispute with Vivendi and sources have said that Vivendi, in retaliation, might oppose Rome's single network plan.

However, Italian Economy Minister Roberto Gualtieri spoke with Vivendi chief Arnaud de Puyfontaine by telephone on Nov 16 to seek clarification and ease tensions.

Representatives of the government and Vivendi then continued talks, sources said.

One of the sources said Vivendi would continue to oppose the draft law, but had agreed to talks over cooperation in the single network project and TIM's board renewal.

The Treasury, TIM and Vivendi all declined to comment.

A meeting between Gualtieri and French Finance Minister Bruno Le Maire is scheduled for Thursday morning in Rome.

(Editing by Gavin Jones; Editing by Kirsten Donovan)

By Giuseppe Fonte and Elvira Pollina