Italy's Olivetti has won majority control of Telecom Italia with a stake of more than 50.2 per cent, following its $65 billion (€61.53 billion) bid for Europe's fourth-biggest telecoms group.

The definitive result, with the exact number of shares, will be announced on May 26th, the bourse said in a statement.

Olivetti will decide at a board meeting today whether to take up the stake, but its success in winning majority control appears to make the decision a foregone conclusion.

Olivetti's managing director, Roberto Colaninno, has said he would automatically accept a 67 per cent or higher stake in Telecom, but had cautiously reserved the right to accept a lower stake so long as he could assure effective control.

The news is a dramatic blow for Telecom Italia, which had fought hard to defeat the bid in order to pursue a rival merger with Germany's Deutsche-Telekom, and puts pressure on managing director Franco Bernabe to resign.

Mr Colaninno had shocked Italy's fusty corporate world with his U.S.-style bid for Italy's crown jewel, and most said it would never succeed. But now he has had the last laugh.

Three years after taking on Olivetti, the bespectacled 56-year-old has claimed one of Italy's most staggering coups. Described as a straightforward, serious man, Colaninno was the brains behind Europe's biggest takeover bid, but is still little known abroad.

Olivetti's bid had closed last night with word that several key Telecom allies had switched allegiance, raising Olivetti's hopes of securing a significant stake.

Banks and insurers controlling 3.1 per cent of Telecom Italia said they had accepted Olivetti's offer of €11.5 per share.

The defectors included Italy's top bank, San Paolo IMI, whose investment bank was advising Telecom's defence.

Italy's Generali also tendered its stake of around 1 per cent, although analysts had expected this since the insurer has the main architect of Olivetti's bid - merchant bank Mediobanca - as its largest single shareholder.