Alitalia's directors agreed a rescue plan which will give it immediate access to the promised 400m loan which will keep it in business.
But the board of Alitalia which is 62%-owned by the Italian state has delayed a decision on whether to split the troubled carrier into two companies.
The basic survival plan agreed with the unions is for 3,700 job cuts, one sixth of the workforce, which will save it 280m and allow it allegedly to break even by 2006.
The plan to re-structure the carrier into two companies was put forward by Alitalia's chief executive Giancarlo Cimoli. Under the scheme, one company AZ Fly would run the flight operations and the other, AZ Service would control ground services like maintenance.
The Italian government would cut its stake in AZ Fly to under 50% next year and AZ Service would be controlled by a state-owned financial holding company.
But the unions feared this would lead to further job losses while BA, which has objected to state aid for the Italian carrier in the past, said this new scheme amounted to more government help.
BA chief executive Rod Eddington has written to UK transport secretary Alistair Darling calling on the British government to stop Alitalia receiving more aid.
BA feared Alitalia's 1.6bn debt would be merely shifted from the airline to the AZ Service company which the government would have subsidised.
In a statement, BA said: “We estimate that the total additional subsidy to Alitalia could be 3.4bn.” It called on the British government to press the EC “ensure the “normal state aid rules” applied.
Alitalia is to hold more talks with its unions to decide whether or not the planned splitting of the carrier into two will go ahead.