A government decree converting a EUR300 million euro (USD$473 million) emergency loan to Alitalia into an asset on the ailing carrier's books will come into effect this week, the economy minister said on Tuesday.
The move, which the government has said is temporary, is designed to win auditor blessing for the airline's precarious finances.
Alitalia's board was meeting on Tuesday to approve its 2007 accounts, but it may want to see the decree published in the Official Gazette before doing so.
The airline's finances have deteriorated sharply in recent months as passenger bookings have fallen, debt has risen and costs have spiraled higher on the back of soaring oil prices.
The board had already adjourned its meeting from Monday to Tuesday as it waited for the government to follow through on its pledge to turn the emergency loan into an asset.
Italian legislation usually comes into force the day after being published in the Official Gazette, unless specified otherwise.
Tuesday's edition of the Gazette did not mention the decree.
Economy Minister Giulio Tremonti had earlier said it would be published by Wednesday.
The text of the decree states that the loan will be used to avoid Alitalia's capital falling under the legal minimum, which would effectively force the airline to declare bankruptcy.
It says that a capital increase will have to be launched to allow the repayment of the loan after the government's 49.9 percent stake in Alitalia has been sold.
The airline, flying close to financial collapse after a planned sale to Air France-KLM fell through, reported a pretax loss of EUR215 million for the first quarter, compared with a loss of EUR152 million in the year-earlier period.
Italian media have said auditor Deloitte & Touche might not sign off on the airline's 2007 accounts due to concerns about the accounting for some items and about whether the loan could be treated as part of Alitalia's capital.
Further weighing on Alitalia's finances is an expected EUR97 million write-down of the value of its aging fleet.
The accounting move by the government is likely to invite further scrutiny from the European Commission, which is already looking into whether the EUR300 million emergency loan violated EU rules barring further state aid.
Prime Minister Silvio Berlusconi, who took office this month after winning an April general election, has promised to find a consortium of Italian businessmen to rescue Alitalia, but such a group has yet to emerge.
