* Treasury hopes to win time from ECB to seal merger deal

* Preferred bidder UniCredit still debating course of action

* Government weakened after junior party quits coalition

ROME/MILAN, Jan 20 (Reuters) - State-owned Italian bank Monte dei Paschi di Siena has seen no potential bidders come forward yet to scrutinise confidential data after opening its books to suitors on Monday, two sources familiar with the matter said.

Italy has been working to cut its 64% stake in the Tuscan bank after pledging to do so when it came to the rescue and bought the 5.4 billion euros ($6.5 billion) holding in 2017.

The virtual data room is likely to be open for at least month, one of the sources said.

Rome had been discussing a potential deal with UniCredit which it sought to make more appealing by offering to inject capital into Monte dei Paschi and a bad loan clean-up scheme, as well as approving tax breaks for mergers taking place in 2021.

In a blow to the talks, however, UniCredit CEO Jean Pierre Mustier decided to step down in April. The bank is looking to identify a successor by early February.

Meanwhile, Italy's government emerged weakened from a confidence vote called this week by Prime Minister Giuseppe Conte after a junior partner quit his coalition.

Monte dei Paschi also faces a Jan. 31 deadline to submit to the European Central Bank (ECB) a plan to fill capital needs worth up to 2.5 billion euros.

Rome wants to plug the hole via a merger so as to find a lasting solution to the woes of the world's oldest bank.

The Treasury had counted on presenting the ECB with the outline of a deal so as to win time to work on it, sources had said previously.

But UniCredit, which would only consider a deal that won't harm its capital reserves, is yet to sign a confidentiality agreement to start formal discussions.

Speaking on condition of anonymity, a government official expressed confidence the Milanese bank would eventually do so.

The Treasury opposes stop-gap solutions such as a mooted Tier 1 capital issue the bank is considering as an alternative way of raising cash, the sources said.

UniCredit is still debating internally what to do in relation to Monte dei Paschi, a source familiar with the matter had told Reuters.

Other banks, including Banco BPM or the Italian arms of Credit Agricole and BNP Paribas, which the Treasury had thought of as potential partners for Monte dei Paschi, have so far failed to show any interest, sources have said.

($1 = 0.8258 euros) (Reporting by Valentina Za and Giuseppe Fonte;Editing by Elaine Hardcastle)