Italy’s prime minister Silvio Berlusconi is considering “temporary nationalisation” of Alitalia after a rescue bid for the troubled airline collapsed yesterday.

The bid, led by an all-Italian consortium of industrialists CAI, was thrown out at 2pm yesterday when five of Alitalia’s nine unions objected to it because of plans to cut 3,000 jobs.

The Italian cabinet was due to meet this morning to discuss how best to rescue the national carrier which is 49.9% owned by the Italian government but which has been losing €2 million a day and has accrued debts of €1 billion.

The airline filed for insolvency at the end of August so that a state-backed rescue and relaunch effort could get under way.

The government-appointed commissioner running Alitalia Augusto Fantozzi said in the meantime the airline will continue to fly until the money runs out, however he warned that if no further credible bids were forthcoming, he would have to start liquidation proceedings.

Bank Settlement Plan payments in the meantime remain guaranteed by IATA.