ITALY'S decision to provide Alitalia SpA a 300 million-euro loan (US$479 million) will prevent the unprofitable airline from collapsing and give investors time to prepare bids, Prime Minister-elect Silvio Berlusconi said.

Outgoing Premier Romano Prodi, who has been trying to sell the state's 49.9-percent stake in Alitalia for more than a year, announced the financing late on Tuesday. Prodi said the loan was larger than the government originally intended because Berlusconi asked for more cash to give him time to find a buyer.

"The government had no choice," Berlusconi said in an interview on New Space radio. "Had they not done it, Alitalia would have gone into bankruptcy and that isn't acceptable."

Prodi's cabinet approved the financing a day after Air France-KLM Group withdrew its takeover bid for the airline. Berlusconi, who called the Air France bid "arrogant" during his successful campaign to win the April 13-14 elections, had pledged to put together an Italian alternative. So far, no new bidders have come forward.

Prodi said that there was "unacceptable interference" in the sale process during the election campaign, which coincided with the Air France negotiations. Berlusconi said that union opposition to the offer led the airline to withdraw.