As prospects for a sale of Alitalia to Air France-KLM recede and Italy’s troubled national airline moves closer to receivership, a rich and powerful “white knight” has appeared on the horizon to save it - none other than Silvio Berlusconi, twice Italian Prime Minister and, according to the polls, likely to win a third term in the country’s general election next month.

Mr Berlusconi, describing the Air France-KLM offer for the partly state-owned Alitalia as “arrogant and unacceptable”, said that he was backing a rival offer by Air One, Italy’s biggest private carrier, with financial support from Banca Intesa, the second-biggest bank in Italy. Mr Berlusconi, who earlier in the election campaign had said that he could accept the Air France-KLM offer provided Alitalia kept its “national” character, yesterday indicated that he would reject it if he won office next month.

Mr Berlusconi urged Romano Prodi, the outgoing Prime Minister, to arrange a state bridging loan to allow time for an “all-Italian” bid to be presented. He indicated that such a bid might include him and his children Piersilvio, executive vice-president of Mediaset, and Marina, president of the family’s holding company Fininvest, who he said were “ready to help” alongside “Arab investors ready to participate with minority stakes”. Mr Berlusconi’s three children by his second wife, the actress Veronica Lario – Barbara, Eleonora and Luigi – also hold stakes in his companies.

He added: “Even Greece and Portugal have a national airline. One can’t just give up Alitalia. I’ve been silent until now, but I spoke up when I saw the unacceptable conditions.”

However Mr Berlusconi later backed away from the idea that he or his family would sink their own cash into Alitalia, instead urging other “patriotic” businessmen to step forward, insisting that “there is an Italian option”.

To some sceptics, all this looked like a blatant electioneering appeal to nationalist and protectionist sentiment. “If there were Italian businessmen capable of saving Alitalia, why didn’t they come forward earlier?” said Pier Ferdinando Casini, leader of the Christian Democratic UDC, which was formerly part of Mr Berlusconi’s Centre Right alliance but has deserted it to run independently.

The board of Alitalia announced last weekend that it was accepting the bid by Air France-KLM. This provoked protests from politicians and trade union leaders over the sale price, proposed job cuts and the impact on the economy of Milan because of plans to cut flights from Malpensa airport and make Rome the only hub for Alitalia. Letizia Moratti, the mayor of Milan, said that Italy was “handing its transport policy over to foreigners”.

Air France-KLM said that it was losing patience and would pull out of the deal unless threats of strikes and a lawsuit by SEA, the Malpensa airport operator, were lifted. However, Giuseppe Bonomi, SEA’s chairman, insisted that it would not drop its lawsuit against Alitalia for €1.25 billion (£970 million) in damages over its decision to downgrade Malpensa.

Maurizio Prato, chief executive of Alitalia, said its situation was grave, and Tommaso Padoa-Schioppa, the Finance Minister, said bluntly that the only alternative to Air France’s bid was bankruptcy. Alitalia loses more than €1 million a day. Mr Padoa-Schioppa said: “Whoever is interested in Alitalia should come ahead formally and with concrete offers. Time is running out very rapidly.”

Union leaders who walked out of talks with Jean-Cyril Spinetta, chief executive of Air France, on March 18 are to meet him again next Tuesday, together with Alitalia management. Air France has set a March 31 deadline for agreement with the unions. Marco Veneziani, of the UIL union, said: “There may be room to negotiate.”

Ansa, the Italian news agency, said that receivership would almost certainly involve grounding 50 of Alitalia’s 174 aircraft, which would mean more than doubling the 2,100 job cuts among air and ground staff envisaged in Air France’s plan. Alitalia would have to be put up for liquidation and its assets sold to pay debts of €1.5 billion.

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