But Roberto Colaninno, Olivetti's chief executive, said the sale of 24.4 million shares, which was announced on Tuesday, was carried out for treasury management purposes, and was "fully legitimate ... the only mistake concerns the delay in the announcement".
Olivetti sold the block of shares, which amounts to 0.46 per cent of Telecom Italia's ordinary capital, for an average 9.73 euros per share, netting 237.5m euros (pounds 160m). Its announcement on Tuesday prompted the Italian stock exchange regulator Consob to ask Olivetti for clarification.
Telecom's head, Franco Bernabe, who is in the United States to try to win fund managers' support for his defence plan, accused Olivetti of attempting to depress Telecom's stock by "throwing millions of shares into the bourse".
While the ensuing row has diverted attention away from Olivetti's increased 65m euro bid, Telecom Italia is poised to launch an all-out offensive against Olivetti as soon as Consob lifts restrictions on what it can say.
The constraints were meant to be in place until Olivetti formally tabled its bid. But with shareholders due to vote on 10 April on Mr Bernabe's own proposals, the rules are set to be relaxed.