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UPDATE 1-Italy pushes back deadline in concession row with Atlantia -government sources

(Updates, adds details)

ROME, Sept 30 (Reuters) - Italy’s government has pushed back the deadline to make a decision on whether to revoke Atlantia’s motorway unit concession, two government sources said on Wednesday, as a dispute between the infrastructure group and Rome festers.

The sources said the government would meet in the next 10 days to strip Autostrade per l’Italia of its lucrative toll-road concession if Atlantia did not come up with new proposals.

Rome initially set Wednesday as a deadline and the Cabinet met earlier to discuss developments in the long-standing motorway dispute, triggered by the collapse of a bridge in Genoa more than two years ago that claimed 43 lives.

A company source said earlier on Wednesday that Atlantia was relying on mediation by Prime Minister Giuseppe Conte to avoid revocation of its concession.

Such a move would trigger a default on a European scale, with 7,000 jobs and some 16.5 billion euros ($19.3 billion) of debt at risk, the source said.

Rome has said it is ready to revoke Autostrade’s concession if the Benetton-backed infrastructure group fails to agree on a deal to sell the unit to state lender CDP. ($1 = 0.8530 euros) (Reporting by Giuseppe Fonte and Stefano Bernabei; Writing by Giulio Piovaccari; Editing by Gavin Jones and Peter Cooney)