Prodi claims ignorance over Telecom Italia's plans

In a contentious Parliamentary hearing on Thursday, Italian Prime Minister Romano Prodi said he was kept in the dark about Telecom Italia’s controversial restructuring plan and insisted his government never interfered in its decision to remake itself into a digital media conglom.

The address before the lower house of Parliament comes at one of the toughest periods in the Prodi government’s five-month life.

Political rivals accuse Prodi of interfering in the former state-run telco giant’s digital media plans, sending a signal to outsiders that the government will be an obstructionist force in big business.

Prodi answered his critics defiantly. “I have never been informed of the plans of Telecom Italia,” he said, adding that his government had no intention of renationalizing the telco.

The political furor erupted earlier this month after Prodi publicly criticized Marco Tronchetti Provera, then-chairman of Telecom Italia, for his radical plan to split up Europe’s fifth-largest telco firm and focus on broadband media distribution.

In arguing against the restructuring, Prodi released sensitive details about Telecom Italia’s closed-door talks with Rupert Murdoch’s News Corp., Time Warner and General Electric; leak caused political rivals to demand that Prodi step down from office.

Prodi objects to Tronchetti Provera’s decision to split off the country’s largest mobile operator, Telecom Italia Mobile, into a separate company, making it a takeover target for foreign interests.

Days after Prodi launched his withering criticism, Tronchetti Provera resigned.

On Wednesday, Telecom Italia stated there was no plan to sell TIM and that it intended to push forward plans to offer TV programming to 8 million broadband users.

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