Alitalia has been crippled by debts totalling some $1.5bn [AFP]

By agreeing that the sale of Alitalia's assets are not illegal and can proceed, Antonio Tajani said that the decisions will lead to the emergence of a new Italian airline "smaller in size but more efficient" that should shake up the European airline market.

"With these decisions, I am convinced that a new, more dynamic air transport market will be able to develop in Italy," Tajani said on Wednesday.

The commission also found that the $376m state loan that Rome had made to Alitalia in April amounted to illegal state aid and therefore had to be recovered.

However, it ruled that the group of investors would not be liable for repaying the loan to the state, which had been one of their conditions for buying and re-launching Alitalia.

As a result, the loan will have to be repaid with the proceeds from Alitalia's liquidation.

A new, relaunched airline is due to launch on December 1 after the former Alitalia stumbled earlier this year, losing $3.8m a day and crippled by debts totalling some $1.5m.

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