The Chamber of Deputies approved the bill by 135 to 1 with 92 abstaining, while the final green light from the Senate is expected later in February.

Rome's package aims to attract newcomers to Borsa Italiana, after the Milan stock exchange lost a string of prominent companies in recent years to other markets and buyouts.

A disputed measure allows listed companies to issue shares that boost up to 10-fold the voting rights of longstanding investors, as Italy seeks to stem relocations to the Netherlands, where corporate governance rules help established shareholders keep a tight grip on companies.

"There is a real possibility that historical brands, which have made Italian history, may return to Italy," ruling lawmaker Francesco Filini told Reuters, referring to luxury sports carmaker Ferrari.

However, the proposal has angered asset managers, including large foreign funds, which favour a "one share, one vote" rule that prevents a concentration of power in the hands of a few.

Another provision gives investors a bigger say over the way a company's outgoing board presents a list of candidates for the next term, potentially giving minority shareholders veto powers.

The measure was championed by businessman Francesco Gaetano Caltagirone, an investor in Generali who has repeatedly complained about the influence that Mediobanca exerted on the insurer.

Generali Chief Executive Philippe Donnet last year said the legislation could make large listed groups unmanageable.

When passed as expected by the Senate, the new rules will become effective in 2025 and companies including Generali, whose board comes up for renewal next year, will have to amend their bylaws by then to comply.

Backing a parliamentary motion that highlighted the risk of disputes, the government pledged to consider amending the measure on the board list as well as other parts of the bill later this year.

Italy's legislation also doubles to 16 billion euros the asset threshold above which the country's cooperative lenders, whose shareholders typically have one vote each regardless of the size of their stake, must turn into regular joint stock companies, removing an obstacle to potential takeovers.

That reform dates back to 2015 and was "one of the most popular adopted under former Prime Minister Matteo Renzi: now it will fall victim to the restorative and anti market fury," said Luigi Marattin, an opposition lawmaker from the centrist Italia Viva party led by Renzi.

"There will probably be some banks that aim to merge while preserving the 'one head, one vote' principle," he added.

($1 = 0.9310 euros)

(Editing by Ros Russell)

By Giuseppe Fonte