UPDATE 1-Italy's Generali says Edizione pulls auditor list

(Adds details, background)

MILAN, April 16 (Reuters) - A controversial list of candidates for internal auditors at Assicurazioni Generali (GASI.MI: Quote, Profile, Research) will not be put forward at its annual meeting, Italy's leading insurer said on Wednesday.

Activist fund Algebris, which had presented its own list for internal auditors, had complained to regulators over the Edizione Holding nominees, saying the holding company had interests which meant it was not an independent list.

"The Edizione Holding list will not be put to the vote at the Assicurazioni Generali annual general meeting," Generali said in a statement.

Edizione Holding had already said it would not support the list in order to appease bourse regulator Consob.

The market watchdog threw its weight behind Algebris last week, ruling that the Edizione Holding list was not acceptable because of a connection between the holding company and Mediobanca (MDBI.MI: Quote, Profile, Research), Generali's biggest investor.

Edizione Holding is owned by the Benetton family, who are shareholders in Mediobanca, which has about 15 percent of Generali. Edizione Holding has about 1 percent of Generali.

Algebris, which has 0.5 percent of Generali, first stirred things up at the venerable insurer last year by calling for changes in its corporate governance, which prompted 83-year-old Chairman Antoine Bernheim to talk of a plot to take control.

Funds association Assogestioni has also presented a list of nominees for Generali's independent internal auditor positions.