* Telecom Italia board to examine Fintech's proposal Friday
* Argentine regulator has not yet decided on deal -source
* Deal completion deadline has already been pushed back twice
* Italian junior minister says unaware of Trujillo bid plans (New throughout, adds details; report on possible rival bid)
By Danilo Masoni and Juliana Castilla
MILAN/BUENOS AIRES, Sept 25 (Reuters) - Investment company Fintech has asked Telecom Italia to further extend an agreement to buy the Italian group's controlling stake in Telecom Argentina, Telecom Italia said on Thursday, in a last-minute attempt to ensure the sale does not fall apart.
Telecom Italia agreed to sell its 22.7 percent stake in Telecom Argentina to the investment company of Mexican billionaire David Martinez for $960 million almost a year ago. In a statement late on Thursday, it said it would examine Fintech's proposal at a board meeting on Friday.
It gave no details about Fintech's proposal and a Telecom Italia spokesman was not immediately available to comment.
Italian daily La Repubblica said on Thursday Fintech and the Italian company had agreed on a compromise whereby the deadline for completion of the deal would be extended by 2-1/2 years, with penalties attached if it does not go through.
Closing of the deal was originally due by early August but it has already been delayed twice, awaiting regulatory approval in Argentina.
This month Telecom Italia CEO Marco Patuano said the group would rethink the deal if local regulators did not approve it by September. 25, raising the possibility it could fall apart.
Should this happen, it would leave the heavily indebted Italian group with less cash to invest in faster networks and 4G services, a major plank of Patuano's strategy.
Late on Wednesday a source at Argentina's competition watchdog said the regulator had not yet decided whether to approve the deal.
"They (regulators) might let the deal collapse. But a last-minute compromise solution cannot be ruled out," a source familiar with the situation said on Thursday.
A default by Argentina and a devaluation of the peso have distracted authorities in Buenos Aires and are seen as factors in the delay.
Adding to the uncertainty was a Bloomberg report that U.S. businessman Sol Trujillo was seeking to raise as much as 7.5 billion euros ($9.6 billion) to bid for a stake in Telecom Italia.
According to the report, Trujillo has not approached Telecom Italia directly but has discussed his "Adriano project" with New York-based financial advisers and with Italian officials, including junior minister Antonello Giacomelli.
Giacomelli said, however, that he was not aware of Trujillo's bid plans and added that the Italian government would use its special powers to defend the company if necessary.
"The only Adriano I know is the one who plays for (soccer club) Inter," Giacomelli said.
The company declined to comment on the report.
The sale of Telecom Argentina is part of a broader 4 billion euro plan by Patuano to help cut net debt of more than 27 billion euros and fund investments in Italy and Brazil to keep up with competitors.
Some Telecom Italia investors led by Italian businessman Marco Fossati have criticized the terms of the deal, which was agreed under a previous board controlled by an investor group led by Telefonica, which also operates in Argentina.
Since then, Patuano has remained at the helm of the group, but the board has been renewed, while Telefonica and other core investors have taken steps to exit their seven-year investment.
Fossati, the second-biggest investor in Telecom Italia, told Reuters earlier this month the company should consider keeping its stake in Telecom Argentina.
If the deal fell apart, Telecom Italia, whose credit rating was cut to "junk" status last year, would own an asset whose profits and revenues rose more than 20 percent in the first half. A failed sale would not compromise Telecom Italia's debt- cutting plans since Telecom Argentina is cash positive.
Shares in Telecom Italia ended up 0.11 percent, outperforming a 0.5 percent loss in the European index of telecoms stocks, after retracing from earlier strong gains triggered by the talk of new investment. (1 US dollar = 0.7853 euro) (With additional reporting by Alberto Sisto in Rome; editing by Keith Weir, Jane Baird an Dan Grebler)