Two offers for ailing airline Alitalia under serious consideration by Italy are both well below market price with that of small domestic rival Air One just one euro cent per share, a source close to the talks said on Friday.

Air France-KLM has bid 35 euro cents per share, the source added -- giving the carrier a value of about EUR485 million euros (USD$712.4 million), less than half its market worth. Alitalia also carries about EUR1.2 billion of debt.

Both Air France and Air One declined to comment. The offers are non-binding and both can be reviewed.

Shares in the loss-making airline, which has been hawked by the government for nearly a year, slid after several halts to trading for excessive losses.

Alitalia, whose main attraction for buyers is its dominance of the route from financial capital Milan to Rome, has put off a final decision on the offers to December 18 after the government failed to pick one at a long meeting on Wednesday.

Uncertainty around the sale heightened this week when a group claiming to include Singapore Airlines sent a letter expressing interest to Alitalia's board which met on Thursday.

Singapore Airlines said it had no intention of bidding for Alitalia and it had never heard of "Singapore Airlines Holdings," which was mentioned in the letter, after regulator Consob had asked it to clarify the situation.

And Deutsche Bank slapped down newspaper reports it would advise the mystery group with legal firm Orrick, saying in a statement it saw no reason to agree to a request from the party.

The bid from Air One, backed by Italy's biggest retail bank Intesa Sanpaolo, would be politically expedient as it would keep control with Italians while that of Air France-KLM would take the carrier off the government's hands permanently.