EC transport commissioner Jacques Barrot is ecxpected to recommend an in-depth investigation into Alitalia's rescue plan at a meeting of the full Commission on January 19.
He made his decision after talks with Italy's transport minister Pietro Lunardi earlier this week. The Commission is likely to back Mr Barrot for the probe which could last up to 18 months.
A spokesman for the EC said Mre Barrot was concerned about legal aspects of Alitalia's deal. There has been much speculation that the plan, drawn up by the airline's ceo Giancarlo Cimoli, breaks EC rules on state aid.
The plan would re-structure the troubled carrier into two companies: AZ Fly which would control the flying operations and AZ Service which would run ground services like maintenance.
The Italian state which owns 62% of the airline will retain a stake of at least 30% in AZ Fly. In addition AZ Fly will hold a 51% in AZ Service which is likely to be privatised eventually.
Mr Cimoli said the deal was the only way to secure a 400m loan which Alitalia needed to keep it in business.
It was finally approved by the unions, who feared more job losses above the 3,700 already agreed, and the government in November.
But BA and other airlines criticised the deal saying the re-structuring was merely shifting Alitalia's 1.6bn debt to AZ Service and was in effect another state subsidy.
The two areas of concern for the EC probing alleged illegal state aid are the planned 1.2bn re-capitalisation of the airline and the exact details of the scheme for the state-controlled holding company Fintecna to acquire part of AZ Service pending privatization.