Paving the way for a third broadcasting force in Italy, the country's highest appeal's court has cleared Telecom Italia and multimedia group Seat Pagine Gialle to take over debt-ridden television station Telemontecarlo (TMC) from the troubled Cecchi Gori Group.

The Council of State decided to reject a telecom watchdog's appeal against a decision by a lower court in favour of Seat's purchase of the station. Now a civil court must rule over an appeal made last month by Cecchi Gori against the sale based on the $360 million deal failing to be finalised by a January 31st deadline and therefore expiring.

Cecchi Gori is reportedly unhappy with that the financial dynamics of the deal have changed in the months since the purchase was signed last summer. At the time, Cecchi Gori sold a 25% TMC stake for cash to Telecom Italia multimedia arm The group also agreed to sell a further 50% in exchange for shares. However, share prices have tumbled in the meantime, effectively depreciating the value of the sale.

Legal battles have been ongoing since the deal was struck in August. The telecom watchdog ruled against the acquisition twice, but both times a regional court revoked the decision and approved the purchase.

The watchdog's opposition to the deal was based on an Italian law forbidding Telecom Italia or companies it controls from owning a free-to-air TV network. Telecom has argued that the law contrasted with European regulations designed to encourage liberalisation. Furthermore, its concession has also since been turned into a license, and licence holders are allowed to own broadcasters.

The Italian government has repeatedly supported the purchase of TMC by, saying that a third television force would boost competition and bring advantages to consumers.