MILAN Telecom Italia's top shareholder Vivendi has proposed Luciano Carta, a former chairman at Italian defence group Leonardo to fill a vacant seat on the former phone monopoly's board, two sources said on Wednesday.

Vivendi is currently at loggerheads with Telecom Italia (TIM) management over its plans to revamp its domestic business through the sale of its prized landline grid.

The seat has been vacant since January, when Vivendi CEO Arnaud de Puyfontaine quit the board asking for a new governance set-up.

The French group, which owns around 24% of TIM, has also called into question CEO Pietro Labriola's plan to turn around the company.

The sources said Vivendi has sent a letter to TIM indicating the name of Carta, 66, as candidate to fill the vacant seat.

TIM is expected to hold its next board meeting on June 22, according to a separate source, two weeks after a deadline the company has set to receive improved offers for its grid.

The proposed nomination is due to be reviewed by TIM's nomination committee and then discussed at TIM's board.

Vivendi and Telecom Italia declined to comment.

Last month TIM shareholders failed to select a director to fill the vacant seat as candidates put forward by Italian fund association Assogestioni and small shareholder group were both rejected at the company's AGM.

(Reporting by Elvira Pollina; Editing by Keith Weir)