MILAN, Sept 20 (Reuters) - U.S. fund KKR and Italy's Treasury are set to ask Telecom Italia (TIM) for more time to arrange a joint bid for its landline grid, three sources close to the matter said.

KKR last month won the backing of Prime Minister Giorgia Meloni's government, which authorised the Treasury to join its bid for an asset deemed of strategic national interest.

The U.S. fund's preliminary bid valued the business -- dubbed NetCo -- at around 23 billion euros ($25 billion) including debt and taking into account a number of variables.

In June, TIM granted KKR a period of exclusive talks until the end of September to submit a binding bid for NetCo, which is made up of TIM's fixed access network and submarine cable unit Sparkle.

However, KKR and Italy's Treasury are preparing a formal request to TIM to secure "a few extra weeks" to finalise the bid, the sources said on Wednesday, with one of them adding parties are discussing a two-week extension.

The Treasury needs the green light of the national audit court for the plan to go ahead, two of the sources said, adding that this motivated the request for more time and that the court was expected to give its opinion in October.

TIM directors will discuss the request for more time at a meeting scheduled on Sept. 27.

The Treasury also intends to seek assurances from the country's Antitrust body that the deal does not harm competition, Reuters reported on Aug. 29.

Rome aims to get a minority stake for the ministry in NetCo worth a maximum 2.2 billion euros.

The backing of TIM's top investor Vivendi is also key to smooth a sale. The French group, which owns 24% of TIM, has so far shown little appetite for a deal under KKR's terms.

Vivendi Chief Executive Arnaud de Puyfontaine has requested a meeting with top aides of Economy Minister Giancarlo Giorgetti to discuss the deal, separate people said.

The Treasury is evaluating the request, one of these people said, without adding further details. ($1 = 0.9352 euros) (Reporting by Elvira Pollina and Giuseppe Fonte, editing by Alvise Armellini and Alexander Smith)