Italy's centre-right government is set to approve the controversial sale of lossmaking Alitalia to a group of Italian investors in spite of complaints by rival airlines of illegal state aid and accusations that its assets have been undervalued.

Augusto Fantozzi, the administrator overseeing the flag carrier's bankruptcy, said he had received the green light from a government committee that had determined that the offer from Compagnia Aerea Italiana (Cai) was in line with market prices. Formal government approval may come as early as today.