Shares in debt-laden Italian Internet service provider Tiscali surged 15% on Wednesday, boosted by a report that Carphone Warehouse is still seeking to get a deal to buy its British assets.

The Times newspaper said the talks might continue into the weekend and it was unclear what price has been offered by Carphone Warehouse, Britain's third-biggest broadband Internet service supplier.

"Carphone has always been clear that it would be interested in Tiscali's U.K. arm at the right price and Tiscali has to take a decision soon," a source familiar with the deal was quoted by the Times as saying.

Shares in Tiscali, Italy's third-biggest Internet service provider by market share, were up 13.6% at €0.439 (59 cents) at 1212 GMT, having earlier scaled to a five-week high of €0.457 (61 cents).

"The stock is up on the expectation of a sale. Will it be the turnaround?," one trader said.

Tiscali said in a statement it was in talks for sale of its British assets but did not name the other party.

Carphone Warehouse declined to comment. Its shares were up 2.48% at £1.55 ($2.33).

Last month a source close to the talks told Reuters that Tiscali was in talks to sell the British business to Carphone Warehouse. It had already held talks on the British assets with pay-TV and broadband company British Sky Broadcasting Group.

Tiscali's debt stands at more than €600 million ($801.4 million) and it suspended long-term debt payments in March.

On Wednesday Italian business newspaper MF said financial police were investigating sharp swings in Tiscali's share price in the last few months. Bourse regulator Consob had requested the probe, it said.

Tiscali has received no notice of an inquiry from either the police or Consob, a spokeswoman said. Consob declined to comment.