A Portuguese-Spanish consortium has offered EUR450 million euros (USD$695 million) for airline Spanair, but talks are stuck over conditions imposed by owners SAS, bidders Longstock Financial told a Spanish newspaper.

Vitor Pinto da Costa, president of the Canadian-Portuguese investment fund which is bidding with Madrid-based carrier Gadair, told Tuesday's edition of El Mundo that its offer beat a EUR300 million rival bid from Spanish flag carrier Iberia.

Pinto da Costa said the Longstock-Gadair offer included debt, while Iberia's offer was on top of debt, which a spokesman for Scandinavia's SAS put at around EUR260 million.

An Iberia spokeswoman declined to say how much it had bid for Spanair but confirmed that the airline received a letter from SAS on March 14 saying it had passed to a final round in the bid process.

Buying Spanair would increase Iberia's share of domestic Spanish flights to about 70 percent from around half now, analysts estimate, and help stabilize ticket prices in a market squeezed by cut-throat competition and high oil prices.

Pinto da Costa said its efforts to buy Spanair were stuck on an SAS condition that it pay EUR100 million before a deal is completed. He said that clause, introduced late last week, was unacceptable because Longstock would lose the money if its offer was rejected by regulators.

An SAS spokesman said the airline was talking to several parties and still working on the basis a deal would be signed towards the end of June. However Pinto da Costa told El Mundo that Longstock would no longer be interested if it had not signed a deal by the end of this month.

"IATA's (the International Air Transport Association) summer season starts on March 31and if we don't have the chance to plan our operation counting on summer routes, the purchase would no longer remain interesting," he said.