UPDATE 1-Australia's Telstra open to break up-report

* Telstra considering operational split, says paper * Telstra says has no comment on the report (Adds Telstra comment)

SYDNEY, April 14 (Reuters) - Australia's dominant telecoms provider Telstra Corp Ltd (TLS.AX) will consider a voluntary separation of its retail and wholesale arms in a move to a more conciliatory approach with the government, The Australian paper reported on Tuesday.

Telstra may also sell some assets to the government's proposed $43 billion national broadband network, the paper said without naming any sources.

"The radically different and more conciliatory approach is part of an attempt to ward off the threat of much greater government intervention in Telstra's business," the paper said.

Telstra had no comment on Tuesday's report.

"I don't know where they got this from, so I don't want to comment," said a Telstra spokesman.

Under Chief Executive Sol Trujillo, who is due to leave Telstra at the end of June, the company has often clashed with the government as it fought against efforts to deregulate the domestic telecoms industry.

The paper said Telstra had set up a new committee, headed by chairman Donald McGauchie, to come up with a new approach and to negotiate with the government. The committee does not include Trujillo.

The government's decision last week to fund the broadband network itself, in partnership with private companies, had prompted the shift in thinking at Telstra, the paper said. (Reporting by Mette Fraende; Editing by James Thornhill)