Telecom Italia’s chairman, its independent directors and Italian politicians spoke out yesterday against suspected plans by top shareholder Telefónica to sell some of the company’s most valued assets once it has won control.

The widespread criticism came a day after Telefónica clinched a deal with three Telecom Italia investors to gradually take full control of its rival and its lucrative assets in South America, without having to make an offer to other shareholders.

It points to a stormy board meeting on October 3, where the different factions will debate how Telecom Italia should cut its near €29 billion of debt and fight back from years of sluggish growth in its recession-hit home market.

And it could also pile pressure on the Italian government to step in, after Junior Economy Minister Antonio Catricala on Monday ruled out intervening to keep the former State monopoly under national control.

Telecom Italia chairman Franco Bernabe, who has run the firm since 2008, said yesterday its best option was to raise money from investors to avoid a costly credit rating downgrade to “junk” status.

Asset sales might take too long, he added.

“There is a lot of liquidity, there are favourable conditions for a capital increase,” Bernabe told the Italian Senate in a hearing, adding such a move could be open to new and existing investors, without specifying the amount.

A trade union official has told Reuters that management is preparing an ambitious plan of investment in Italy which, if approved, could require a cash injection, worth – according to a source familiar with the matter – between €3 billion and €5 billion.

However, Telefónica, itself burdened by nearly €50 billion of debt while its German arm is also in the midst of a costly acquisition, is seen as more inclined to support asset sales at Telecom Italia rather than stumping up more cash.

A sale of all or parts of Telecom Italia’s unit in Brazil, Tim Participacoes, which competes directly with Telefónica in the South American country, or of its Telecom Argentina unit could be options to raise badly-needed cash, analysts have said.

But Telecom Italia’s directors spoke out against selling off businesses in fast-growing markets.