The government has put on hold the plans of Cvc and Iliad, which are interested in entering Telecom Italia (TIM) and consolidating the Italian tlc sector.

Three sources close to the discussions told Reuters.

Poste Italiane is ready to invest in Tim, taking over a 9.8 percent stake in it held by Cassa Depositi e Prestiti, a deal the announcement of which is expected over the weekend.

The move could give Poste -- which offers retail telecommunications services but does not own a mobile network, unlike Tim -- a role in market consolidation deals involving the former telephone monopolist.

Poste and Tim have not commented.

After selling its fixed-line network last year to a consortium led by U.S. fund Kkr to massively cut debt under a government-backed plan, Tim has attracted interest from both Cvc and rival Iliad.

However, the government has been cool to such intentions in recent weeks when Cvc and Iliad probed the executive's position, the sources explained.

Cvc is targeting the 24 percent stake in Tim that Vivendi is considering divesting, while Iliad is interested in combining its Italian operations with those of Tim.

Cvc was close to a deal with Vivendi to replace it as Tim's main single investor, but failed to get prior consent from the government to the deal, according to one of the sources. No comment from Vivendi.

Iliad has not been given the go-ahead by the government at the moment either, with some senior members of the Meloniril administration reluctant to support a deal involving a foreign investor, the sources said. No comment from Iliad.

For the government, Tim is a strategic company, and a deal involving its assets needs the approval of Rome, which has authorizing powers over the acquisition of more than a 3 percent stake in the telecommunications company.

(Elvira Pollina and Giuseppe Fonte, translated by Chiara Scarciglia, editing Antonella Cinelli)