UPDATE 1-Italy to use golden power over Milan bourse, wants Euronext merger

* Milan bourse to be sold by London Stock Exchange

* Bourse controls key Italian bond trading platform

* Rome wants Italian-French bid to prevail - source (Adds comment, background)

ROME, Sept 9 (Reuters) - Italy is ready to use its vetting “golden” powers over strategic assets to ensure the Milan stock exchange, Borsa Italiana, is not sold to an unacceptable bidder, Economy Minister Roberto Gualtieri said on Wednesday.

The London Stock Exchange (LSE), which bought Borsa Italiana for 1.6 billion euros ($1.9 billion) in 2007, has put it on sale to win European Union approval for its $27 billion takeover of data company Refinitiv.

Gualtieri said in a statement he hoped Borsa Italiana, which controls the key bond-trading platform MTS, would not end up in the hands of a company outside the euro zone.

He said the government was following the situation closely, “aware of the strategic importance that Borsa Italiana and MTS have for the correct workings of the Italian financial market and the entire Italian economic and production system.”

Rome considers sovereign bond trading platform MTS of strategic importance as it ramps up borrowing to boost its economy that has been ravaged by the COVID-19 pandemic.

Deutsche Boerse, the Swiss stock exchange Six and a consortium comprising France’s Euronext and Italian state-lender CDP are all expected to present offers for Borsa Italiana, sources have told Reuters.

Rome “strongly wants” the consortium of CDP and Euronext to prevail, an Italian government source said following Gualtieri’s statement.

Italian law allows the government to block attempts by EU and non-EU players to acquire a controlling stake in any company deemed strategically important.

Last month, the ruling coalition also increased the powers available to market regulator Consob to shield the country’s stock exchange.

The deadline for non-binding bids for the Borsa Italiana group is Sept. 11, sources said in August.

The EU’s competition regulator expressed concern in June that a combination of LSE’s MTS and Refinitiv, which owns bond platform Tradeweb, would have a large market share in European government bond trading.

Refinitiv is 45%-owned by Thomson Reuters, parent of Reuters News.

$1 = 0.8473 euros Reporting by Giuseppe Fonte and Gavin Jones; Editing by Mark Potter