An Italian consortium that had offered to buy Alitalia has withdrawn the bid in the face of hostility from trade unions at the airline. This raises the prospect of Alitalia's collapse.
The CAI group had set a deadline of this afternoon for unions to agree to conditions of the takeover, but only three of the nine unions are reported to have done so.
Both the consortium and the Italian government had said there could be no more negotiations, and CAI chief Roberto Colaninno that without a union consensus the offer would be withdrawn.
Ahead of the consortium meeting, Italy's labour minister said Alitalia faced a 'very real risk' of liquidation. The carrier is in special administration and is running out of cash to buy fuel.
The Italian government holds a 49.9% share in Alitalia, a national symbol for Italians since it was founded in 1946. But the airline has lurched for years from crisis to crisis, and was placed under special administration in August.
The government has spent €5 billion in the last 15 years to keep Alitalia flying, the last hand-out being a €300m emergency loan in April. But it is barred by European regulations from subsidising the airline with further public money.
Prime Minister Silvio Berlusconi had promised before elections this year that the airline would remain under Italian control. He had opposed a takeover offer from Air France-KLM that was rejected by the unions in April.
