MILAN, March 20 (Reuters) - Telecom Italia

shareholder Merlyn Partners said on Wednesday the debt-laden

company should sell its Brazilian unit this year as part of a

radical restructuring.

The Luxembourg-based alternative investment fund, which held

0.53% of Telecom Italia (TIM) as of Tuesday, also suggested in a

statement that Italy's former phone monopoly should sell off its

consumer business with a target to close that deal in 2025.

Having previously challenged the plan, Merlyn now said that

TIM should seek to conclude the sale of its landline grid to KKR

in a 22 billion euro ($23.9 billion) deal "as soon as

possible" and hopefully by this summer.

The sale of the network grid is the centre-piece of TIM CEO

Pietro Labriola's efforts to reshape the debt-laden group, but

TIM shares plunged this month when he set out financial targets

for the new TIM.

There was no immediate response from TIM.

The network sale has been opposed by French media group

Vivendi which is TIM's largest shareholder and

questions the viability of the residual business.

Merlyn's break-up plans are more ambitious than those of

Labriola and would leave only what it called "TechCo", a tech

and infrastructure company serving business and public

administration.

Labriola is seeking a second term as CEO at a shareholder

vote next month. Merlyn did not say whether it would oppose him

but indicated it wanted to see fresh faces in the boardroom.

"We have a list of candidates to join the board with

international and sector expertise," it said.

($1 = 0.9224 euros)