The airline must return the money by the end of the year, the official said.

Outgoing Prime Minister Romano Prodi called the loan "an act of responsibility" aimed at staving off bankruptcy and the possibility of thousands of lay-offs, according to Italian media reports.

Sylvio Berlusconi, the former prime minister who won the post again earlier this month, had asked Prodi's government to approve the loan.

The government approved the loan after Air France-KLM yanked its bid to purchase the state-run airline. Alitalia had accepted an offer from the French-Dutch group, but union leaders blocked the sale.

The company's board of directors, at its April 8 meeting, "reiterated the Company's need for substantial financial support," according to a press release.

As of February 29, Alitalia's books showed a €1.4 billion ($2.2 billion) debt, up nearly 7 percent from the end or January.

Source: CNN