Incoming premier Silvio Berlusconi said again on Wednesday that a group of Italian businesses and banks were ready to bid for floundering flag carrier Alitalia.
In a radio interview a day after the outgoing government of Premier Romano Prodi approved a 300-million-euro emergency bridge loan to keep Alitalia flying, Berlusconi said that receivership had been avoided and that an offer from an Italian consortium would be made by the end of May.
''Now that we have the loan, it's possible for the Italian group to come forward, study Alitalia's accounts and then, in three to four weeks, put forward a binding offer for the company,'' the 71-year-old centre-right leader said.
As before when he has talked of an Italian rescue plan for Alitalia, Berlusconi gave no details of the businesses and banks involved.
But he went on to warn that job cuts would be unavoidable.
''Unfortunately, a painful reduction in staff will be necessary,'' he said.
On Tuesday evening, Prodi's cabinet approved a bigger-than-expected bridge loan at Berlusconi's request which Alitalia must pay back with interest at market rates by the end of December 2008.
A loan of 200 million euros at most had been expected.
Alitalia has debts of around 1.4 billion euros and is losing some one million euros a day. The loan should keep it going until the end of the summer, observers said.
But before Alitalia can receive a cent, the loan must be approved by the European Union.
The EU has forbidden further state aid to Alitalia and says any loan must be made at market conditions.
The government said Brussels would be given details of the loan later on Wednesday.
PRODI-BERLUSCONI CLASH OVER AIR FRANCE.
Prodi and Berlusconi, meanwhile, swapped barbs over Air France-KLM's Monday decision to withdraw its offer for the Italian Treasury's 49.9% controlling stake in Alitalia.
The outgoing premier on Tuesday accused Berlusconi - as well as unions - of sinking the deal which had been approved by his government and the Alitalia board.
After specifying that Berlusconi had asked for a ''more substantial'' loan than the government had originally intended, he added: ''Excessive interference during the election campaign from well defined political areas, and the numerous difficulties raised by the unions were the basis of Air France's decision''.
But Berlusconi shot back on Wednesday that Air France had been driven away by the unions, which had refused to accept 2,100 layoffs and the downsizing of Alitalia's activities.
''Air France said no mainly because of union vetos... It did not quit because of political interference, as some would have us believe,'' said the billionaire media tycoon, who won his third spell in power in last week's general election.
He argued that the accord with the Franco-Dutch carrier would have deprived Alitalia of its Italian identity and left it at the mercy of decisions ''taken in Paris''.
''I don't believe that could be allowed in a country which wants to remain an economic power... It's in everyone's interests to have a national flag carrier,'' he said.
Under the actual terms of the deal, Alitalia's brand and logo would have remained intact.
Berlusconi said before the April 13-14 election that he would reject an Air France-KLM takeover, preferring an all-Italian solution.
A key Berlusconi ally, the populist Northern League, is also hostile to a foreign tie-up.
Berlusconi repeatedly said an Italian consortium was ready to fend off an Air France-KLM takeover, even saying at one point that his own children were willing to join a rescue group, a statement he later backed down on.
Rome magistrates and Milan bourse watchdog Consob have been watching oscillations in Alitalia's share price.
After the election, Berlusconi softened his line, saying last week that he would consider a deal with Air France-KLM as long as all partners were on an equal footing.
Then on Friday, the centre-right leader said Russian carrier Aeroflot could play a part in Alitalia's future, even if it were taken over by Air France.
Aeroflot, which is the largest East European carrier and controlled by the Russian government, dropped a bid for Alitalia last year.
The idea of a Russian link-up resurfaced last Friday during talks in Sardinia between Berlusconi and Russian leader Vladimir Putin.
Trading in Alitalia shares was suspended on Tuesday.
