By Elvira Pollina

MILAN (Reuters) -Italian state lender CDP and its partners have asked for more time to clinch a deal to buy Telecom Italia’s (TIM) network assets, TIM said on Monday, further delaying a project to create a unified broadband champion.

CDP’s multi-billion bid is part of a long-held plan to combine TIM’s fixed network assets with those of state-backed rival Open Fiber to create a single national network operator under CDP control.

The potential network sale is also a key plank of the strategy set out by TIM Chief Executive Pietro Labriola to turn around the debt-laden former phone monopoly, whose stock is trading at record lows.

Under a preliminary agreement sealed in May and sponsored by Italy’s outgoing government, CDP and TIM had aimed for a binding deal by the end of October.

CDP, which holds a 10% stake in TIM, controls Open Fiber.

The agreement was signed also by infrastructure funds Macquarie and KKR, which hold minority stakes in Open Fiber and TIM’s last-mile network respectively.

But the initial timeline for a non-binding bid has been subject to multiple delays and negotiations have been further complicated by Italy’s national snap election last month.

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CDP, Macquarie and Open Fiber’s request for more time to clinch a deal came in light of “the magnitude of the transaction and … to analyse all the information received from TIM,” Telecom Italia said in a statement on Monday.

KKR plans to remain aligned with TIM in the discussions, TIM said, adding the parties will meet this week.

Valuation issues have been a central part of negotiations.

TIM’s top investor Vivendi is looking for a price tag of 31 billion euros ($30.13 billion) to back a sale of the grid with the prospect of a merger with Open Fiber, a source familiar with the French media group had said.

CDP values Telecom Italia’s landline grid in the region of 20 billion euros including debt, sources had previously said. Other sources pointed to a valuation range of 15-18 billion euros.

Political uncertainty further complicated matters. Nationalist party Brothers of Italy, which led the right-wing bloc that won the Sept. 25 election, backs the creation of a unified network champion.

However, a party official has called on CDP to pursue the plan by taking over TIM, a move he argues would be cheaper for the state lender and offer more protection to TIM’s domestic workforce of more than 40,000.

Giorgia Meloni, the head of Brothers of Italy likely to become prime minister this month, has declined to give a specific view on CDP’s existing plans before taking office.

Any move on the single network plan has been frozen in wait for the new government,” a person familiar with the matter said.

($1 = 1.0290 euros)

(Reporting by Elvira Pollina; editing by Agnieszka Flak, Keith Weir and Richard Chang)