votes among international investors to block a proposed Telecom Italia/Olivetti $11.8 billion transaction.

Liverpool Limited Partnership claimed on Monday to have gathered 14 percent of non-voting savings shares in pledges to oppose the plan, with a further 5.4 percent also in opposition that cannot, for technical or legal reasons, pledge votes.

Two weeks ago Telecom Italia and Olivetti put forward the proposed share conversion and buy back plan. It was intended that Telecom Italia would use money from conversion of some non-voting shares to buy back ten percent of its ordinary shares. TI wants savings shareholders to pay cash equal to 48 percent of the market value of ordinary shares to convert their stock into ordinary shares. From this $11.8 billion would be raised to use to buy back from Olivetti up to 10 percent of ordinary shares.

These moves would free TI to make major acquisitions and alliances and would reduce Olivetti's debts and cut its stake in TI from 55 to 44 percent.

Fund managers are in revolt at the suggested price of the shares and two weeks ago threatened to boycott Lehman Brothers and JP Morgan, the two investment banks involved in advising the companies on the transaction.

Two weeks ago the two companies said they would only proceed with the plan if 80 percent of non voting shares were put up for conversion into ordinary shares. So the 14 percent in opposition, gathered by Liverpool Limited Partnership, places the investors in a very strong position to block the deal.

Gordon Singer, a fund manager for the hedge fund, said: "We feel very comfortable with what we have, especially when you consider that there is a natural non-adherence level of about ten percent from people who just don't show up.'' A shareholders meeting is scheduled for April 18.