The deal brokered by the government on Thursday between the unions and the CAI investor group was enough to prevent Italy's civil aviation authority ENAC from revoking Alitalia's provisional licence to fly.

'There's been a step forward and therefore the provisional licence is not at risk,' said ENAC chief Vito Riggio.

The developments were the first breakthrough in a flurry of talks over the past week to salvage the takeover after CAI yanked its offer because of union opposition and left Alitalia with the prospect of winding up after 60 years of flying.

CAI has now agreed it will keep its bid valid until Oct 15, bankruptcy commissioner Augusto Fantozzi told a news conference after talks with unions at the prime minister's office.

'A social and economic tragedy for the entire country has been averted,' said Mr Luigi Angeletti of the Uil union, which backed the rescue along with Cisl, Ugl and Cgil, the last being Italy's biggest and which had so far rejected the plan.

Suffering from high fuel prices and an economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and labour unrest bled it of cash and caused it to pile up debt.

Political triumph
An Alitalia rescue would be a political triumph for Prime Minister Silvio Berlusconi, who made an election vow to save the flag airline and keep it Italian. His top aide and key ministers presided over talks on Thursday.

Italian Labour Minister Maurizio Sacconi said CAI's takeover offer had not been sweetened to appease unions, though they said CAI had made 'clarifications' on salary levels and profit distribution among workers to satisfy them.

The deal must still win the backing of pilot and flight assistant unions that had bitterly opposed it, but they too signalled a possible change in stance by convening a meeting of their members citing 'new and interesting facts'.

Earlier reports said Air France-KLM was in talks to join the CAI consortium with as much as a 25 per cent stake.

The Franco-Dutch carrier - expected to hold a board meeting on Thursday at which the developments at Alitalia could be discussed - has in the past said it is willing to take a minority stake if Alitalia can return to profit.

Italy's government and the other unions expressed hope the pilots and flight staff would also get on board with the deal on Thursday, with talks expected to continue into the night.

But one of the pilots' unions - the Unione Piloti - said it still objected to the deal in its present form.

Observers say that not all of the pilots' unions would need to agree to the plan in order for it go forward, especially considering that future partner Air One has pilots to help fly Alitalia planes.

For all the optimism and celebratory mood that prevailed over Alitalia's fate, its attempted sale over the past 19 months has made a mockery of previous declarations that a deal to settle the airline's fate was around the corner.

An initial auction to sell the carrier failed when all bidders pulled out, while a subsequent takeover by Air France-KLM fell apart this year due to union opposition.

This time, Alitalia risked having its flights grounded next week if it were unable to present a rescue plan or declare it has enough funds for the next three months - which the bankruptcy commissioner had already said is a luxury it does not have.

British airline easyJet and Germany's Lufthansa have requested routes in Italy that were shed by Alitalia earlier this year under a cost-cutting plan, Italy's civil aviation authority ENAC said on Thursday.

Easyjet requested 20 of Alitalia's former Italian domestic routes operating out of Rome's main airport, Fiumicino, ENAC said. Lufthansa requested eight routes operating out of Milan's Malpensa airport. -- REUTERS