* Vivendi says open to alternative short-term strategy for TIM
* Vivendi CEO may suspend executive functions as TIM chairman
* Vivendi still committed to new TIM CEO's three-year plan
* Vivendi criticizes activist investor Elliott's approach (Adds share price, recasts intro)
MILAN, March 15 (Reuters) - Telecom Italia's main shareholder, French media group Vivendi, has declared itself ready to support an alternative strategy to boost the Italian firm's short-term share price, as activist investor Elliott Advisors pushes for a shakeup.
Last week Elliott said it had taken an unspecified stake in Telecom Italia (TIM) and was ready to replace board members in a drive to improve strategy, value and governance.
Vivendi, which owns 24 percent of TIM, told Reuters on Wednesday night that it still supported a longer-term strategy unveiled by TIM's new chief executive last week and was committed to creating an Italian telecoms and content champion.
However, it added, "like any other shareholder sensitive to leveraging its investments, Vivendi would be ready, if necessary, to support another strategy capable of generating a short-term rise in the TIM share price," a Vivendi spokesman said in an email.
"As always, the shareholders will decide."
In addition, Vivendi CEO Arnaud De Puyfontaine, who also serves as executive chairman of TIM, might suspend his executive functions at the former phone monopoly. As chairman, he will have a central role in dealing with Elliott's campaign.
"During the period devoted to this strategic debate, Arnaud de Puyfontaine has indicated that he is considering suspending his executive functions at TIM," the Vivendi spokesman said.
Elliott has yet to outline its proposals for TIM, but sources said the fund wants it to be run as a true "public company" with the majority of board members independent.
The sources said it also plans to push for the conversion of TIM's savings shares into ordinary ones - a move that would help raise cash but which Vivendi blocked in late 2015 - and seek a spin-off of the soon-to-be-created network company.
TIM shares rose 0.6 percent to 0.79 euros in morning trade on Thursday. The savings shares, which offer a guaranteed dividend but do not entitle holders to vote, were up 1.3 percent.
TIM has lost more than one-third of its market value since Vivendi first took a stake in mid-2015, though the French investor says the stock had been declining for a decade before that. It is down more than 70 percent since the start of 2005.
TIM has not paid a dividend since 2012, but last week new Chief Executive Amos Genish held out the promise of richer shareholder returns with a new three-year strategy meant to help it cope with new rivals appearing in both broadband and mobile.
Vivendi said in Wednesday's email that the 2018-20 plan was an ambitious and realistic move to boost TIM's financial performance. Some brokerages, including Goldman Sachs and Bryan Garnier, raised their recommendations on the stock after the strategy was released.
However, Elliott's arrival has raised expectations of other, potentially radical changes.
Vivendi has invested close to 4 billion euros ($5 billion) in TIM since first becoming a shareholder. It has tightened its grip on the company by appointing two-thirds of its board.
The hands-on approach has led to tensions with some other shareholders and the Italian government, which considers TIM of strategic national importance. Rome used its so-called "golden power" last year to ensure it had a say in some strategic decisions at TIM.
Vivendi also on Wednesday criticized Elliott's track record of waging campaigns elsewhere.
"Elliott Management repeatedly attacks states and companies ... and is known for its financial approach focused on short-term gains, most probably leading in this case to dismantling TIM," the spokesman said.
The activist investor declined to comment.
The fund has until Tuesday to propose amendments to the agenda for TIM's annual shareholder meeting called for April 24. ($1 = 0.8084 euros) (Additional reporting by Stephen Jewkes Editing by Mark Potter and Mark Bendeich)