A consortium of Italian investors yesterday withdrew its takeover offer for Alitalia because of opposition from trade unions, leaving the loss-making flag carrier staring at bankruptcy, barring last-minute government intervention.

Maurizio Sacconi, welfare minister who had attempted to mediate, said that there was no alternative. He declared that the airline, which is 49.9 per cent government-owned and has debts of some €1.2bn ($1.7bn), was heading for bankruptcy.