BRUSSELS (Reuters) - Lufthansa's bid for a minority stake in Italian rival ITA Airways could harm competition and lead to higher prices, EU antitrust regulators said on Monday, ramping up pressure on the German carrier to come up with stronger remedies.

The European Commission said the deal threatens competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the U.S., Canada and Japan. It would also strengthens ITA's dominant position at Milan's main airport.

The European Commission set out its concerns in a statement of objections to Lufthansa, confirming a Reuters story earlier this month. Lufthansa and the Italian government can now put forward new remedies.

The deal underscores the wave of consolidation in the airline industry, with British Airways-owner IAG seeking to buy out Spanish airline Air Europa.

Lufthansa wants to buy a 41% stake in the state-owned Italian rival for 325 million euros ($351.46 million) as part of a capital increase.

($1 = 0.9247 euros)

(Reporting by Reporting by Foo Yun Chee and Inti Landauro)