Alitalia has only made a profit four times in the last 16 years

Alitalia can access the emergency fund, guaranteed by the Italian Economy Ministry, any time in the next six months and must repay it within a year.

The state airline is cutting 3,700 of its 20,700 staff as it seeks to return to profit within three years.

The loan deal was dependent on Alitalia agreeing pay-off terms with unions.

As part of a deal struck earlier this month, staff being made redundant will get two years of state welfare benefits, while remaining on the company's books for two years.

They will then get three years of redundancy payments at a lower level.

Alitalia lost 330m euros in 2003 as it struggled to get to grips with high costs, spiralling oil prices, competition from budget carriers and reduced demand.