Marco Tronchetti Provera on Friday night quit as chairman of Telecom Italia, amid the continuing row between the company and Romano Prodi’s government.

The company reported late Friday night that an extraordinary board meeting had been called in Milan. Soon after, news agencies said that Mr Tronchetti, who took control of TI in a controversial takeover in 2001, had quit. He remains the single biggest shareholder and no information was immediately available on whether that would change.

Guido Rossi, the prominent lawyer who recently headed an inquiry into corruption in Italian football, was reported to have assumed the chairmanship. The company did not comment.

Mr Tronchetti’s resignation, which was yet to be officially confirmed by TI on Friday evening, follows a tumultuous week. On Monday, the country’s dominant telecoms provider astonished investors by announcing that it was splitting into three in a sudden U-turn from a strategy it had been pursuing to merge its fixed-line and mobile telephony businesses.

The U-turn, TI said, was to let it focus on broadband and media services. But the split, which was widely seen as the precursor to a sale of the company’s network infrastructure and mobile businesses, was immediately criticised by politicians and unions. Only a year ago TI said it was formally creating a “one company model” and championing the convergence of its fixed and mobile arms.

Mr Prodi at first expressed concern and surprise this week and said the plans of the company, whose rationale had barely been disclosed, would need to be examined. Amid press reports that Mr Prodi knew about the split in advance, his office released a full account of two meetings that Mr Prodi and Mr Tronchetti had held. Mr Prodi’s office revealed that Mr Tronchetti had been seeking deals with Rupert Murdoch’s News Corporation as well as General Electric and Time Warner.

But Mr Prodi said he had not been told of the extent of the restructuring, still less that the company might seek to sell its Telecom Italia Mobile arm.

Any sale of Tim would be controversial as all other large mobile companies in Italy are in foreign hands. It later emerged that an adviser to Mr Prodi had been examining state involvement in the purchase of the company’s fixed-line infrastructure.

Mr Tronchetti, one of Italy’s most restless dealmakers, rose to the top of Telecom Italia in a highly-leveraged deal.

From his seat as chairman of Pirelli, he purchased control of TI with huge amounts of debt and funding from several partners. But he vastly overpaid, and has fought ever since to keep the debt under control while servicing interest payments.

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