By Paola Arosio

MILAN (Reuters) - Telecom Italia Executive Chairman Franco Bernabe is considering resigning at a board meeting scheduled for Thursday, a source close to the situation said, as his plans to relaunch the heavily indebted company may not get enough backing.

"We are heading towards a resignation," the source told Reuters on Friday.

A second person familiar with the situation said Chief Operating Officer Marco Patuano could take up Bernabe's powers to ensure management continuity and that its core shareholders would name a new chairman with a broadly representation role.

"Core shareholders are not worried because in such a case Patuano is the CEO," the person said.

Telecom Italia could not be reached for comment.

Bernabe, who has been at the helm of the group since 2008, was considering proposing to the board meeting on Thursday a capital increase of up to 5 billion euros ($6.8 billion) to cut debt and fund badly needed investments, two sources close to the matter said earlier on Friday.

But they added Bernabe was checking if he had enough support for the plan, which could divide the board, as its core investors are reluctant to inject fresh cash into the company.

In a parliamentary hearing this week, the 65-year-old manager said Telecom Italia needed to raise fresh capital to avoid a credit rating downgrade to "junk" status and that the best way would be through a capital increase.

Bernabe spoke out against possible plans by top shareholder Telefonica to sell some of the company's most valued assets, such as Brazilian unit TIM Participacoes, once it gains control of its Italian rival.

Director Luigi Zingales and other four independent directors have also spoken out against the sale of the Brazilian subsidiary.

Telefonica and three Italian investors struck a deal this week that could give the Spanish group full ownership of Telco, a holding that controls Telecom Italia via a 22.4 percent stake, sparking criticism among Italian politicians concerned that a strategic company could fall into foreign hands.

Other shareholders of Telco are insurer Generali and banks Mediobanca and Intesa Sanpaolo. ($1 = 0.7385 euros)

(Reporting by Paola Arosio and Danilo Masoni)