Russia Poised for Alitalia Talks

Italy's failing flag-carrier, Alitalia, faces a crucial week when its future looks likely to be decided at least as much by politics as economics.

Having made the salvation of the group's "Italianness" central to his successful election campaign, Silvio Berlusconi has to deliver on the promise of an alternative solution to the bid tabled and then withdrawn by Air France-KLM. The group has only enough cash to stay airborne until about the end of May.

Representatives of the incoming and outgoing governments agreed to find a way to keep Alitalia going while its fate was decided. Sources close to the talks said it could include a line of credit worth €100m (£80m) to €150m.

Despite Berlusconi's assurances to the contrary, there is still no trace of the all-Italian consortium which, he claimed, was eager to get its hands on Italy's debt-laden, loss-making national airline.

The only confirmed indication of interest has come from the Russian leader, Vladimir Putin, who said that Aeroflot was ready for talks. But Berlusconi said they could only be held once the negotiations with Air France-KLM had concluded.

Since winning last week's election, he has toned down his opposition to the Franco-Dutch bid, which he previously termed "offensive".