UPDATE 1-Telecom Italia chooses Cairo for talks on La7
* Cairo bid is only for TI Media unit La7
* Cairo had been competing with Clessidra
* Della Valle had expressed interest on Saturday (Releads, adds Della Valle, background)
MILAN, Feb 18 (Reuters) - Telecom Italia said on Monday its board had agreed to enter into exclusive talks with media firm Cairo Communication for the sale of part of its TV division Telecom Italia Media.
In a statement, the Italian telecoms incumbent said the talks with Cairo were for the sale of the whole of TI Media's TV network La7 but excluded a 51 percent stake La7 held in the MTV Italia station.
Cairo, which looks after advertising for La7, had been in a race to win control of TI Media assets with Clessidra, the private equity fund whose offer had been for the whole of the group.
The deadline for offers ended last Friday.
On Saturday, businessman Diego Della Valle, head of Italian shoemaker Tod's, said he had asked the Telecom Italia board for time to study a possible purchase.
In a statement after Telecom Italia's announcement on Monday, Della Valle acknowledged the board's decision.
"We wanted to try and build a new model of media company involving a group of Italian investors, professionals currently working at La7 and others ... we hope this will happen anyway," he said.
Italy's former prime minister Silvio Berlusconi, who is running in general elections on Feb. 24-25, owns Italy's biggest private media group, Mediaset.
In a television news show on Monday, La7 anchorman Enrico Mentana said top executives at powerful investment bank Mediobanca had been split over whether to delay the sale or go ahead with it.
Mediobanca is a shareholder of holding company Telco, the leading shareholder in Telecom Italia.
TI Media's La7 channel has gained audience share thanks to popular talk shows but doubts remain over how long it can sustain the pace amid economic recession and tough competition.
Telecom Italia had previously hoped to sell its 77.7 percent stake in the loss-making company by the end of 2012 to help cut debt and focus on its core telecoms business, but was hampered by low bids. (Reporting by Stephen Jewkes; Editing by Antonella Ciancio and Dale Hudson)