Alitalia's special administrator will make a last-ditch attempt to sell Italy's loss-making national airline today by public tender before calling in the liquidators after a failed rescue bid.

Alitalia faces liquidation in a matter of days after a plan to rescue the carrier by Italian investors collapsed last week when unions refused to accept its conditions. Flights continued as normal on the weekend but could be grounded in a week's time.

With Prime Minister Silvio Berlusconi, who made an election promise to rescue the airline, acknowledging no foreign airline was about to step in and that Alitalia could be doomed to bankruptcy, the auction appears a mere formality.

"We will proceed with a public request (for offers)," the special administrator, Augusto Fantozzi, told Il Messagero daily in comments published yesterday. "It will formalise what I have been doing - without any results so far despite all my efforts - regarding the main assets."

Suffering from the high fuel prices and an economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and labour unrest bled it of cash and caused it to pile up debt.

As concerns about Alitalia's ability to pay for fuel grew, it suffered its first asset seizure with the Israel Airports Authority confiscating its bank accounts over a $500,000 debt.

A report in an Israeli paper, which could not be confirmed, said a Tel Aviv court had also ordered the seizure of other local assets of Alitalia such as company cars.

Mr Berlusconi opposed the previous centre-left government's bid to sell the state's 49.9 per cent stake, including an offer from Air France-KLM, saying it must stay in Italian hands. The media mogul returned to power in May promising to rescue it and used his influence to rally 16 business groups in the CAI consortium. But CAI withdrew its offer last week after pilots and cabin crew refused to accept job cuts and new contracts.

The government rules out further state aid or, as some leftists propose, the renationalisation of Alitalia. Italy is already in trouble with the European Commission over a €300 million loan to keep the airline flying.

"There is no possibility of another rescue bid so it could be that our Alitalia is heading towards bankruptcy procedures," Mr Berlusconi said on Saturday.