Alitalia put off a decision to pick a buyer until next week after the Italian government failed to choose its preferred bidder for the ailing carrier.

The move highlights the difficult choice Italy faces in choosing between small domestic player Air One and Air France KLM, the world's largest airline by sales, to resuscitate a company that loses over €1 million a day.

Air One is seen as the politically expedient choice since it appeases unions and politicians, but analysts say Air France is more likely to restore Alitalia to long-term health. A government meeting late on Wednesday ended with no decision despite an intense media build-up that it would be decisive for Alitalia's fate.

The government will now ask for more details of the bids offered from the airline's board, newspapers said. Alitalia said its board would meet on Tuesday to make a definitive decision on the sale process.