* New A2A proposal on Edipower governance unsatisfactory-Iren CEO

* Edipower deal either solved on Saturday or off-CEO

* Iren, A2A shares outperform utility sector (Releads, adds Iren CEO comment, shares)

By Stephen Jewkes and Giancarlo Navach

MILAN, Jan 26 (Reuters) - Italian regional utility Iren is not satisfied with a new proposal put forward by domestic peer A2A over governance at power company Edipower, casting a shadow over a broader deal with France's EDF to reorganise Italy's No 2 utility Edison.

Edison, which is worth $5.7 billion, is controlled by France's EDF and holding company Delmi, which is headed by A2A and includes Iren.

In December, after months of wrangling, EDF reached a long-awaited deal to win control of Edison for 700 million euros ($908 million).

Under the deal, EDF would effectively swap Edison's 50 percent stake in Edipower for the Edison holding of the core Italian investors in Delmi.

In a statement late on Wednesday Iren said its board had not approved the term sheet of the Edipower agreement that had been sent to it by A2A because it did not reflect Iren's interests.

"We received a new proposal that we are examining. It's a step forward. But there are things to review and as it is now it does not satisfy us," Roberto Garbato told reporters on Thursday.

The Delmi shareholders meeting, called on Thursday and expected to decide on the Edison revamp, will remain open until Saturday.

"On Saturday we either close the deal or break it off," Garbati said, adding he could not rule out Iren leaving Delmi, in which it holds a 15 percent stake, or even Edipower, in which it holds 10 percent.

Integration between A2A, Iren and Edipower would create Italy's second-biggest power producer.

EDF plans to use Edison, which produces and sells electric power, natural gas and crude oil, as a platform to develop its gas business in Italy.

EDF has previously said if it is forced to launch a mandatory bid on minority shareholders at Edison above a price of 0.84 euros per share the revamp agreement will need to be changed.

Shares in Iren closed up 2.3 percent while A2A shares were up 3.8 percent. The European utility sector was up 1.9 percent. ($1 = 0.7708 euros) (Editing by Hans-Juergen Peters and Erica Billingham)