Silvio Berlusconi, the Italian Prime Minister, appeared to have snatched victory from the jaws of defeat yesterday as Alitalia’s four main union confederations signed up at the eleventh hour to a rescue plan they had rejected a week ago.

The powerful left-wing CGIL union signed the deal during a meeting with Italian investors from the CAI (Italian Air Company) consortium. CGIL was among the unions that refused last week to sign the plan, prompting the investors to withdraw their €1 billion (£795 million) offer on September 18. The CISL, UIL and IGL unions also signed yesterday.

Unions representing pilots and flight attendants were last night meeting Gianni Letta – Mr Berlusconi’s right-hand man, who persuaded CAI to retable its offer – at the Prime Minister’s office. They have so far held out against job losses, but the about-face by Guglielmo Epifani, the CGIL leader, puts them under pressure to follow suit.

Mr Epifani said: “An absolutely positive comprehensive agreement was reached.” He said that he was satisified with last-minute concessions by the consortium on pay, conditions, holidays and temporary contracts. “This will give hope to hundreds and hundreds of workers who could otherwise expect nothing.”

Reports said that Air France-KLM was willing to take a 10 per cent to 20 per cent stake in the new Alitalia if the deal was sealed. Mr Berlusconi staked his reputation on an “all-Italian” deal after dismissing an Air France-KLM takeover in the spring during Italy’s election campaign, when he took an overtly nationalist stand. He is likely to argue that his promise that Alitalia would remain in Italian hands has held good, with only a minority stake taken by a foreign airline.

Augusto Fantozzi, the government-appointed special commissioner who has been running Alitalia since it entered bankruptcy protection in August, said he had asked ENAC, Italy’s civil aviation authority, not to carry out its threat to suspend Alitalia’s licence. There were sufficient funds to keep the airline flying until the end of the month, although flights might have to be reduced. He said the new Alitalia would take shape in mid-October.

Luigi Angeletti, head of the UIL union, said that the deal involved 3,250 job losses over three years, with the merged Alitalia and Air One, Italy’s second-largest airline, slimmed down to 12,500 employees. Maurizio Sacconi, the Labour Minister, said that redundancy payments would be as generous as possible.

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