(Adds details, background) MILANO, Sept 28 (Reuters) - Italy’s Benetton family on Tuesday said it would exit a consultation pact among core shareholders in Mediobanca in order to avoid taking sides in a power struggle centred around the Milanese merchant bank. The announcement came shortly before Mediobanca’s top investor Leonardo Del Vecchio said it would propose changing the bank’s by-laws to give more power to the board and its shareholders. The decision over the Mediobanca pact comes as the Benettons’ holding company Edizione is setting new strategic guidelines and reflects its will to remain “absolutely neutral” in relation to its financial investments, the company said. Edizione has a 2.1% stake in Mediobanca. It also has a 4% stake in Generali, Italy’s biggest insurer, in which Mediobanca is the single largest investor. Mediobanca is embroiled in a governance row at Generali, where it is pushing for the reappointment of CEO Philippe Donnet for a third mandate, defying opposition from Del Vecchio and another leading shareholder in the insurer. Edizione wants to keep a neutral stance also in relation to the spat over Generali, a source close to the matter said. The Mediobanca consultation agreement, which is set to expire on Dec.31, relates to a 10.7% stake in the bank. (Reporting by Elisa Anzolin; additional reporting by Francesca Landini; editing by Valentina Za) Our Standards: The Thomson Reuters Trust Principles.