MILAN/ROME, April 23 (Reuters) - The state owner of Italy'sMetroweb has rejected a proposal by Telecom Italia totake a stake in the broadband company and progressively reach100 percent, according to an email seen by Reuters and twopeople close to the matter.
The latest twist in long-running talks between TelecomItalia and state lender Cassa Depositi e Presititi (CDP) overMetroweb's future ownership could favour Vodafone, whichhas also set its sight on the firm.
CDP indirectly owns a stake in Metroweb through itsinvestment arm Fondo Strategico Italiano (FSI).
"CDP and FSI are not in the condition to go ahead ... atterms outlined in the MOU (memorandum of understanding) draftsent by Telecom Italia," FSI head Maurizio Tamagnini toldTelecom Italia CEO Marco Patuano in an April 21 email.
It was not clear whether the rejection puts an end tonegotiations between Telecom Italia and CDP. (Reporting by Danilo Masoni and Alberto Sisto, additionalreporting by Luca Trogni, editing by Stephen Jewkes)