MILAN - Members of Telco, the holding company that controls Telecom Italia SpA, are discussing renewing their pact for one year when it runs out in April 2010, sources close to the issue said.

The current pact was for three years and a one-year extension would leave the issue of a possible revision open, especially given the downturn in the phone company's share price, said the sources.

Shortening the pact to one year from the current three is an option, one of the sources said.

In any renewal Telco's structure is likely to remain unchanged, another said. Telco has 24.5 percent of Telecom Italia. Spain's Telefonica holds 42.3 percent, while insurer Assicurazioni Generali SpA has 28 percent. Investment bank Mediobanca SpA and Intesa Sanpaolo SpA each hold 10.6 percent and the Benetton family's Sintonia fund has 8.4 percent.

Telecom Italia's share price has almost halved since Telefonica acquired its stake in Telco in 2007 and Italian politicians have shown unease with Telefonica's influence over Telecom Italia. An Italian official in September criticised Telefonica's large stake as a significant problem.

Telefonica's chairman, Cesar Alierta, said on Friday he was happy with the stake in Telecom Italia and the alliance was very profitable for both partners.

Telefonica is on track to get 1.3 billion euros ($1.92 billion) worth of synergies with the Italian telcoms operator, he said. Telefonica paid 2.3 billion euros for its Telco stake.

Telecom Italia shares were down 0.5 percent at 1.176 euros at 1432 GMT, when the DJ Stoxx European telecoms sector index .SXKP was down 1 percent. (Reporting by Stefano Rebaudo; Editing by Greg Mahlich)