UPDATE 2-Edizione backs off Generali auditor showdown

(Adds Algebris statement)

By Jo Winterbottom

MILAN, April 14 (Reuters) - Edizione Holding backed away from a confrontation over internal auditors at Italy's leading insurer Assicurazioni Generali (GASI.MI: Quote, Profile, Research) on Monday, saying it would not support its candidates to appease a regulator.

Edizione Holding "will not use its vote for candidates ... in the list it presented," the holding company controlled by the Benetton family, who are shareholders in Generali's biggest investor Mediobanca (MDBI.MI: Quote, Profile, Research), said in a statement.

Italy's bourse regulator Consob had thrown its weight behind fund Algebris in the dispute last Friday, ruling that Edizione Holding's rival to the fund's auditor list was not acceptable because of a connection between Edizione Holding and Mediobanca.

Algebris, which has 0.5 percent of Generali, has presented its own list for internal auditors to be elected at the shareholders' meeting on April 26 and had complained to regulators that Edizione's list was not independent.

It said in a statement on Monday it had filed for an injunction to prevent Edizione Holding's list being presented at Generali's annual meeting.

Funds association Assogestioni has also presented a list.

Algebris caused an unprecedented furore last year by calling for changes in the insurer's corporate governance, which prompted Chairman Antoine Bernheim to talk of a plot to take control.