Spain says Telefonica-Telecom Italia stories false

BARCELONA (Reuters) - Spain's industry minister, Miguel Sebastian, said some stories about an imminent takeover by Spain's Telefonica (TEF.MC) of Telecom Italia (TLIT.MI) had been made up, while reiterating that the government would not intervene in any possible deal.

"The government's always said we don't have anything to say about this deal between the companies. But I don't think it's right for anyone to make up stories that are false," Sebastian told reporters at a mobile telecoms fair in Barcelona.

Sebastian did not say whether he was referring to recent reports in Italy that Telefonica had the green light from Berlusconi's government for a takeover, or another report by Spanish newspaper El Pais.

El Pais said the Spanish government was in favor of Telefonica taking over Telecom Italia following Italian power firm Enel's acquisition of Spanish utility Endesa.

"The (Spanish) government wants to finish off its European presidency with a major corporate deal," El Pais said on Sunday.

Telefonica denied any negotiations with Telecom Italia in January and its chairman Cesar Alierta said earlier this month that the firm's priority was to exploit synergies from its industrial partnership with Telecom Italia.

Telefonica first entered Telecom Italia in 2007 and currently holds an indirect stake of about 10 percent.

(Reporting by Robert Hetz; Writing by Tracy Rucinski; Editing by Rupert Winchester)