The government owns around 32.4% of Eni, chiefly through the 27.7% it holds indirectly via state lender Cassa Depositi e Prestiti (CDP). The Treasury has a direct stake of 4.7%.

Shares in Eni were down 0.8% at 1545 GMT after Bloomberg News reported that the Treasury was considering a sale of up to 4% in Eni once the group's share buyback is completed.

The energy group declined to comment on the report.

To reward investors, Eni launched a share buyback last year to buy and cancel a total of 275 million shares. The group has recently said it aimed at completing the buyback even before an end-of-April final deadline.

The cancellation of the shares is expected to increase the government's total stake in the energy group to above 34% of voting shares, creating wiggle room for the government to reduce its total shareholding without losing grip on the company, which is considered strategic.

Italy's Economy Minister Giancarlo Giorgetti said in November that reducing the Treasury's stake in Eni following the company's share buyback scheme was a good idea. At current prices the sale of a 4% stake would raise 2 billion euros ($2.17 billion), helping cut public debt.

In addition Reuters also reported that several investment banks had approached the Treasury with offers to help it sell part of its stake in Eni.

($1 = 0.9206 euros)

(Reporting by Francesca Landini Editing by Gianluca Semeraro, Mark Potter and Susan Fenton)