Italy's economy minister has urged SEA, the operator of Milan's Malpensa Airport, to drop a lawsuit against Alitalia because it jeopardizes the airline's possible takeover by Air France-KLM.

"The only possible way to solve the issue is that SEA drops the lawsuit or accept a symbolic agreement," Economy Minister Tommaso Padoa-Schioppa said in an interview published by Il Corriere della Sera newspaper on Wednesday.

Padao-Schioppa said the outgoing government had already approved EUR430 million euros (USD$679.9 million) worth in funds for Malpensa and SEA.

He said SEA's hostility to the deal with Air France-KLM was a more difficult problem to solve than opposition from the unions.

"The union has a strong interest in saving Alitalia," he said.

SEA said late on Tuesday it was not ready to give up its USD$2 billion lawsuit against Alitalia over plans to halve flights out of Malpensa Airport as part of the prospective deal with Air France-KLM.

SEA said it would consider an out-of-court settlement if it was paid damages.

The Franco-Dutch carrier has said approval from both unions and Italy's next government, which holds a 49.9 percent stake in Alitalia, is essential to completing the deal.