Telecom Italia and nascent internet giant have confirmed that they are in talks to buy a majority stake in Telemontecarlo (TMC), the troubled Cecchi Gori Group-owned TV platform.

A joint statement from Telecom and stated that the two companies were in the "preliminary stages of negotiations" for the free-TV network, although local newspaper reports said that a deal could be finalised in days.

The disposal of large majority stake - or even an outright disposal - would go a long way to solving Cecchi Gori's much publicised financial problems, clearing the path for a flotation. Cecchi Gori's TV operation has reportedly lost more than L500 billion in the last four years.

But the prospect of a sale to Telecom Italia has already provoked a reaction from rival media groups, including Silvio Berlusconi's Mediaset. Opponents have cited Italian laws prohibiting telecoms operators owning broadcasters, claiming that it would breach competition laws as Telecom Italia would have stakes in pay-TV, through Stream, and free-TV.

TMC is Italy's third largest, behind Mediaset and state-owned RAI, but trails a long way behind with a market share of just 3%.