UPDATE 3-Berlusconi threatens to re-nationalise Alitalia

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By Deepa Babington and Giselda Vagnoni

ROME, April 29 (Reuters) - Italian prime minister-elect Silvio Berlusconi threatened on Tuesday to re-nationalise Alitalia if the European Commission continued to "whine" about a government loan to keep the ailing airline afloat.

But opposition leader Walter Veltroni attacked the idea as reminiscent of moves by Russia's President Vladimir Putin and even Berlusconi's close allies were sceptical that such a move -- after years of trying to privatise Alitalia -- was feasible.

Emboldened by an overwhelming victory in national and city elections this month, Berlusconi has hit back at the European Commission for doubting the $467 million government loan fell within European rules barring further state aid to the airline.

The tycoon said a bid by a group of Italian businessmen remained the first choice for salvaging the carrier, but that EU trouble could prompt the state, via its railway, to buy the 50.1 percent of Alitalia AZPIa.MI that it does not own.

"If they continue whining, we could take a decision in which Alitalia could be bought by the state -- by the state railway," Berlusconi said. "It's a threat, not a decision."

Italy's national railway, Ferrovie dello Stato, is being held up as a turnaround success story after cutting 2007 losses by 80 percent and reporting a sharp rise in revenue last week.

'NONE OF OUR BUSINESS'

EU Transport Commissioner Jacques Barrot told Reuters at the weekend that the EU was not trying to create problems but simply trying to enforce the rules, failing which the courts would.

The European Commission said it was not concerned by whether Italy chose to nationalise Alitalia, but could intervene if the state paid more than it would have fetched in the open market.

"Whether a member state wants to privatise a company or nationalise a company, that's none of our business," EU Commission competition spokesman Jonathan Todd told reporters.

"However, if in the process of nationalisation or privatisation there is a transfer of state resources to that company, then that is clearly covered by state aid rules in the treaty."

Gianfranco Fini, a close Berlusconi ally, said the magnate had suggested letting private companies buy the airline and have the state run it. But Fini questioned why anyone would allow the state to run an airline they had bought.

Far-right leader Umberto Bossi was even more sceptical, saying he simply did not think the railway could buy Alitalia.