Berlusconi is said to be angry at the president's move

Critics say the bill would allow Mr Berlusconi, who owns three TV stations, to strengthen his hold on the media.

President Carlo Azeglio Ciampi asked parliament to re-examine the bill passed earlier this month.

Mr Berlusconi has said he is open to what he described as "intelligent" changes to the bill.

It's a significant setback and it has certainly angered Berlusconi Franco Pavoncello Political science professor

The European human rights organisation, the OSCE, welcomed the president's decision as it believes the bill undermines the independence of the media.

"It means that Italy is going back into the... constitutional culture of Europe's history which means the independence of media from direct government interference," the OSCE's high representative for media, Freimut Duve, told the BBC.

Lost revenue

The BBC's David Willey, in Rome, said Mr Ciampi's move was a political slap in the face for Mr Berlusconi.

He said left-wing parties and many Italian journalists had praised Mr Ciampi for calling a halt to a law that is widely perceived as tailored specifically for Mr Berlusconi's own benefit.

I see no problem in taking in what the head of state says and, if need be, to act to change the bill as he indicates Silvio Berlusconi Italian Prime Minister

"It's a significant setback and it has certainly angered Berlusconi," said Franco Pavoncello, a professor of political science at John Cabot University in Rome.

Several Italian papers also say the prime minister was angry at the president's decision.

"There's no point in hiding it... It's a serious blow for the government, above all for the prime minister," said daily newspaper La Stampa on Tuesday.

The bill reversed a court ruling which would have forced the PM's company, Mediaset, to sell off one of its three TV stations.

Few Italians can yet receive digital TV and unless the court ruling is changed, Mr Berlusconi stands to lose advertising revenue, our correspondent says.

The bill was passed on 3 December by the upper house of parliament after being approved in October by the lower house, or Chamber of Deputies.

Under Italian law, parliament can vote on the bill again without making any changes. The president would be obliged to sign the bill if it passed a second time.

'Intelligent' changes

Mr Ciampi's move - the first time he has refused to sign a bill for anything other than budget reasons - came after he met Mr Berlusconi earlier in the day to discuss the matter.

After the talks, Mr Berlusconi said he was open to what he described as "intelligent" changes to the bill.

"I see no problem in taking in what the head of state says and, if need be, to act to change the bill as he indicates," he said.

"Parliament could also just say that the bill was drafted in the right way and, consequently, re-approve it without any changes."