The sale, dubbed "Project Botticelli", puts the Milan bourse at the centre of the latest shake-up in the European exchange sector, with non-binding bids from France's Euronext, Switzerland's Six and Germany's Deutsche Boerse.

Sources said Six has made the highest offer for Borsa, which the LSE bought in 2007 for 1.6 billion euros.

"The LSE is in no rush to take a decision. There are many stakeholders that LSE needs to please, including EU antitrust regulators and Italian lawmakers," one of the sources said.

The LSE declined to comment.

It is trying to sell Borsa Italiana as part of regulatory remedies needed to clear its $27 billion purchase of data provider Refinitiv and needs a deal by Dec. 16 when EU antitrust regulators are expected to make a decision.

Refinitiv is 45% owned by Thomson Reuters, which is the parent company of Reuters News.

Euronext, which has made the lowest bid, has teamed up with Italian state-owned lender Cassa Depositi e Prestiti (CDP) whose backing the exchange operator believes is key to selling the deal to lawmakers in Rome.

If their bid is successful, CDP is set to take a stake of around 8% in Euronext, becoming its top investor alongside Caisse des Depots et Consignations which also owns 8%.

'GOLDEN POWER'

Italy's Treasury can block any unwanted takeover of Borsa using its "golden power" legislation.

Rome is keen to have a tight grip on Borsa's MTS platform, which is used for trading Italian sovereign debt, sources have said.

Both Six and Deutsche Boerse are trying to lure Rome away from Euronext and have offered Italian officials guarantees on governance as well as representation on their respective boards.

In an interview with Corriere della Sera, Six CEO Jos Dijsselhof said it would welcome an Italian partner and was ready to offer a governance structure that took into account Italy's interests in both Borsa and MTS.

Deutsche Boerse has offered to buy Borsa Italiana in tandem with Italian investors and would give Rome a seat on its supervisory board, sources have said.

($1 = 0.8483 euros)

(Reporting by Pamela Barbaglia in London, Valentina Za in Milan and Tom Sims in Frankfurt; Additional reporting by Elvira Pollina in Milan, Giselda Vagnoni in Rome and Mike Shields in Zurich; Editing by Alexander Smith)

By Pamela Barbaglia, Valentina Za and Tom Sims