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UPDATE 3-Judge to rule on Vivendi request to halt Mediaset European TV plan

* Last minute talks failed to yield accord

Mediaset and shareholder Vivendi at odds over European TV

* Feud between two sides dates back to 2016 (Releads with comments from legal source)

By Elvira Pollina and Mathieu Rosemain

MILAN/PARIS, Nov 29 (Reuters) - An Italian judge will decide on Vivendi's request to block Mediaset's pan-European television project after the two groups failed to settle their long-running dispute, a legal source said on Friday.

The case has become a tussle between billionaires over the future of European TV as competition grows from streaming services from the likes of Netflix and Amazon.

Mediaset is backed by the family of former Italian Prime Minister Silvio Berlusconi while its 29% shareholder Vivendi is led by Vincent Bollore.

The two groups, locked in a whole series of legal arguments, have clashed over the Italian group's plans to create a pan-European TV champion through Dutch-based holding MediaForEurope (MFE).

Mediaset aims to use the MFE platform to build TV alliances in Europe to help it compete with streaming services and has built a 15% stake in Germany's ProSiebenSat.1.

Vivendi, which has its owns plans to create a southern European media force, says governance plans at MFE would give Berlusconi too much power and hurt minority shareholders.

A deal between the two sides would free Mediaset's hand to press ahead with merging its Italian and Spanish units.

POTENTIAL SETTLEMENT

A Milan judge earlier this month gave the companies until Nov. 29 to settle their disagreements over MFE after earlier attempts to reach an accord failed.

However, overnight talks failed to yield an agreement and the two sides faced off in court. It was not clear when the judge would rule on Vivendi's request to suspend the MFE operation.

The two sides have been holding talks to try to find a way to settle not just the MFE case but all their outstanding issues.

According to sources, a deal being worked on between the two could see Vivendi sell around two thirds of its stake in Mediaset to MFE but differences over price and other terms have held things up.

Mediaset and Vivendi, owner of pay TV group Canal+ and Universal Music Group, have been embroiled in a protracted dispute since a failed pay TV deal in 2016.

Vivendi is the top shareholder in Italian phone incumbent Telecom Italia.

(Reporting by Elvira Pollina in Milan and Gwenaelle Barzic in Paris; writing by Stephen Jewkes; editing by Jason Neely, Kirsten Donovan)