UPDATE 1-Funds delay holds up Alitalia deal closure-source

(Adds Alitalia administrator statement)

ROME, Dec 1 (Reuters) - The closing of the sale of Alitalia's best assets has been delayed because the CAI investors' consortium is unable to raise and deliver the funds before Dec. 12, a source close to the matter said.

Augusto Fantozzi, the administrator overseeing the Italian airline's bankruptcy, said in a statement that CAI would pay for the 427 million-euro ($541 million) purchase starting Dec. 12, when the airline's assets would be transferred to it.

The deal was to have closed on Nov. 30. Fantozzi earlier told state radio technical reasons caused the delay.

CAI's investors have already approved raising up to 1.1 billion euros to fund the purchase of Alitalia, but will be able to hand over the money only on Dec. 12, the source said.

CAI has agreed to pay 427 million euros in cash and take on debt worth 625 million euros under the government-backed deal.

However, CAI will be responsible for Alitalia's expenses starting Dec. 1 and will assume any risks related to its operations from Dec. 12 onwards even if the transfer of assets is delayed, Fantozzi said in the statement.

The green light from a European monitor trustee -- one of two remaining regulatory approvals needed -- has already been informally given and a formal approval is expected later, the source said.

Alitalia's sale to CAI comes after a difficult two-year hunt for a buyer that included a failed auction and a subsequent deal to sell it to Air France-KLM (AIRF.PA) which collapsed.

The French airline and German rival Lufthansa (LHAG.DE) are now in the running to buy a 20 percent stake in Alitalia after it is in CAI's hands. (Reporting by Alberto Sisto; Editing by David Cowell and Jason Neely)