(Adds details, comments, sources)
MILAN, March 22 (Reuters) - Most of Telecom Italia's (TIM) board resigned on Thursday, triggering a full board reshuffle in a move seen as pre-empting activist investor Elliott's bid to change the way top shareholder Vivendi runs the company.
Elliott Advisors announced this month that it had taken a stake in TIM and called for six board members to be replaced in a bid to improve strategy, value and governance.
The resignation of the majority of the board on Thursday, including TIM Chairman and Vivendi CEO Arnaud de Puyfontaine, automatically means a new board must now be elected in a shareholder vote.
"This will allow TIM shareholders to decide quickly on a new full board ... rather than voting on piecemeal changes to the board as called for by Elliott," de Puyfontaine said in a statement.
One source said the board move was Vivendi's attempt to drive a wedge between Elliott and institutional investors.
Another source added the French media group had already secured the backing of some institutional funds to ensure Vivendi-backed executives are appointed to the new board.
De Puyfontaine was likely to be nominated as part of Vivendi's new list of board candidates, the person said.
Shareholders will vote on a new board on May 4.
TIM said in a statement that Deputy Chairman Giuseppe Recchi resigned, as expected, after accepting a position at another company. Another seven directors, including de Puyfontaine, will step down on April 24.
All eight board members who resigned, including Recchi, came from Vivendi's slate. Half of them were independent directors.
TIM has lost more than a third of its market value since Vivendi first took a stake in mid-2015 as the French group has slowly tightened its grip on Italy's biggest phone group.
Last year Vivendi appointed two-thirds of the TIM board and named its own chief executive as TIM executive chairman, raising concerns among other shareholders and politicians in Italy who consider the company of strategic national importance.
Elliott had proposed removing six of the TIM board members nominated by Vivendi, including de Puyfontaine, and replacing them with some well-known figures in Italian business.
A third source said the board would have been very difficult to handle without Thursday's move.
"It would have amounted to tinkering," the source said, adding Vivendi had in effect given full power to the shareholders.
On May 4 "shareholders will have the opportunity to choose between an industrial plan able to create value in the long term, and a program of short sighted financial engineering," de Puyfontaine said.
Elliott had no immediate comment.
The fund, which has built up a potential stake of more than 5 percent in TIM, has said it would urge a new board to convert TIM's saving shares into ordinary ones, push for a listing or partial sale of its soon-to-be-created network company and reintroduce dividend payments.
Elliott's attack came just days before TIM Chief Executive Amos Genish - a telecoms veteran and a favorite of Vivendi Chairman Vincent Bollore - held out the promise of richer shareholder returns with a new three-year strategy.
De Puyfontaine said he remained committed to the project of transforming TIM - a former state phone monopoly plagued by a high debt pile and new competitors appearing in both broadband and mobile.
In the same statement, TIM said former CEO and current board member Franco Bernabe had been appointed deputy chairman.
Bernabe will also take responsibility for the company's security department and activities/assets important for defense and national security previously assigned to Recchi, it said. (Reporting by Agnieszka Flak Additional reporting by Paola Arosio and Gwenaelle Barzic Editing by Susan Fenton)