ROME, Dec 23 (Reuters) - Italian banks have up to a year to apply for a state guarantee on debt they issue, the government's emergency plan to shore up its troubled lenders states, according to a draft of the decree seen by Reuters.
An initial June 30, 2017 deadline to apply for the guarantee can be extended by up to six months if the European Commission agrees, the decree says.
In the early hours of Friday, Prime Minister Paolo Gentiloni's cabinet approved the decree, aimed mainly at keeping afloat Tuscan lender Monte dei Paschi di Siena .
To access the guarantee, banks must present a restructuring plan if they need more than 500 million euros and the guarantee applies to more than 5 percent of their total debt, the draft decree says.
Bonds to be guaranteed must have a maturity of between three months and five years, except for covered bonds, which can have a maturity of up to seven years, it says. (Reporting By Gavin Jones and Valentina Za)