MILAN (Reuters) - Shares in Telecom Italia (TIM) fell more than 9% on Thursday as investors remained worried over rising debt levels and ongoing weakness in its domestic division pending a planned landmark sale of its fixed-line access network.

The former phone monopoly, which is planning a radical revamp centred on the sale of its domestic landline grid to KKR for up to 22 billion euros ($23.8 billion), reported earnings in line with analysts' expectations late on Wednesday.

However, Milan-listed shares in TIM were down 7.3% by 0900 GMT on heavy volumes after falling as much as 9.2% earlier in the day.

The stock has been volatile in recent months with investors fretting over the prospects for the business that will be left behind once the grid deal goes through.

Investors so far have shown little confidence in the plan, with top shareholder Vivendi asking for a higher price and flagging concerns over the remaining service business.

TIM is awaiting a green light from the European Union antitrust authority that could come as early as Thursday to complete the sale of the network assets to U.S. fund KKR.

TIM said domestic revenue, which makes up the bulk of its sales, fell 1.3% to 2.8 billion euros, while net financial debt rose to 26.6 billion euros from 25.7 billion euros as of the end of last year.

The former phone monopoly said part of the debt increase was linked to a provisional 249 million euros seizure over an alleged fraud. TIM said that stripping out that temporary effect, debt dynamics were in line with its full year guidance.

($1 = 0.9246 euros)

(Reporting by Elvira Pollina and Giancarlo Navach; editing by Keith Weir)