American International Group Inc Chief Executive Robert Benmosche said last week he would quit unless Chairman Harvey Golub leaves the company, Bloomberg reported on Wednesday.

Benmosche told the board during a meeting on June 25 that he wanted more control over the divestment of AIG's Asian life insurance unit, including making management changes, Bloomberg reported, citing unnamed sources.

The board of the insurer, which is nearly 80 percent owned by the U.S. government after a $182.3 billion rescue, did not make a decision during the meeting, the report said.

AIG declined to comment.

The development is the latest sign of tensions within the AIG boardroom after a deal to sell American International Assurance (AIA) to Britain's Prudential Plc for $35.5 billion fell apart.

Prudential wanted to cut the price of the deal and Benmosche backed doing so, but the AIG board voted against doing that, overruling its hard-charging CEO, sources have said.

AIG was counting on the AIA sale as a big step forward in its efforts to repay taxpayers.

Benmosche favored accepting new terms for a deal because, even at a lower price, it offered more liquidity and sooner. In the process, though, Benmosche left some AIG directors unhappy with his handling of the transaction, a source told Reuters earlier this month.

But Benmosche, the fourth person to hold the top AIG job since June 2008, was seen as safe in his role, with the board wanting him to stay CEO, the source said at the time.

An important concern for the board was the difficulty of finding another person to take on the job of running AIG, according to the source at the time.

Last week, the Financial Times reported that the botched sale had led to increased tensions between Benmosche and Golub, triggering concerns that one of the two men might leave less than a year after their appointment.

(Reporting by Paritosh Bansal; Editing by Gary Hill)

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