The Italian government formally approved the move on Tuesday, marking a setback for Etihad, which rescued Alitalia from near bankruptcy in the summer of 2014.

The process is expected to lead to Alitalia’s sale or liquidation, raising the prospect that it will follow the path of KLM and Iberia in ending a history as one of Europe’s big standalone airlines, the Financial Times reported.

The board of the lossmaking airline noted the “serious economic and financial situation of the company” and the “unfeasibility of finding alternative solutions” quickly.

The Italian government said it would provide the carrier with a €600 million bridging loan, that will allow it to operate for about six months or longer.

Carlo Calenda, economic development minister, said the €600 milllion was the “maximum” the government could afford.

He added that administrators would be entrusted with being “open to potential acquirers” and to “guarantee services, routes and personnel”.

But analysts said liquidation could be an option once the bridging loan runs out.

Etihad took a 49% stake in the Italian airline as part of its drive towards global expansion in 2014, but Alitalia has a high cost base and faces rising competition from low-cost rivals in the European market, especially Ryanair.

Alitalia adopted an aggressive restructuring plan in March, negotiated with trade unions, but it was rejected by the airline’s nearly 12,000 employees in a vote last month.

This meant that the airline’s main investors, including Italian banks UniCredit and Intesa Sanpaolo, could no longer commit themselves to a €2bn financing package to give Alitalia another lease of life.

The sale process for Alitalia will kick off in the next 15 days, Italy’s Industry Minister said on Wednesday, Reuters reports.

"The commissioners need to draw up a programme and are expected to start looking at expressions of interest within 15 days," Carlo Calenda said on Italian radio.