Alitalia said on Wednesday it needed more time to decide whether to allow an extension in talks with unions on its takeover by Air France-KLM, just days away from a March 31 deadline.

Air France-KLM appeared to have broken an initial stalemate with unions by offering on Tuesday to modify its plans for job cuts at Alitalia and continue talks with union leaders beyond the March deadline, a concession welcomed by key unions.

But Air France-KLM said it wanted Alitalia's approval, too, to ensure the delay did not risk worsening the airline's precarious finances.

Alitalia, which loses more than EUR1 million euros a day and has EUR1.2 billion (USD$1.89 billion) of debt, said its board discussed the matter on Wednesday but opted for more time to examine legal and financial issues related to an extension.

It added its board would meet again soon to decide the matter, but did not specify a date.

Alitalia shares were suspended for the second day in a row for excessive gains, and were indicated up 22 percent at 0.56 euros. They fell sharply when the deal was announced and then shot up on hopes of a rival bid from an Italian consortium.

Alitalia's chairman was quoted by unions on Tuesday as saying the Italian Treasury was against prolonging the talks, leaving the fate of any extension unclear.

The Treasury holds a 49.9 percent stake in Alitalia, whose fate has become a hot issue in election campaigning ahead of the April 13-14 vote.

Media magnate Silvio Berlusconi -- who last week raised the prospect of an Italian counter-bid -- claimed on Wednesday Air France-KLM's concessions to unions were spurred by his comments.

"I note that we have obtained success after I launched my appeal to Italian businessmen to show their pride and not lose control of the national carrier," he told Italian television.

He also promised that a group of "important businessmen" seeking to launch a counter-bid would reveal themselves within days, but wanted three to four weeks to make a formal offer.

British airport transfers company Terravision earlier said it would be interested in joining such a group.

Alitalia's smaller domestic rival Air One, whose offer to buy the carrier was rejected by Italy's outgoing government, has also said it is ready to launch a new offer, but needs three or four weeks to inspect the ailing carrier's books first.

Political rivals have dismissed Berlusconi's talk of a rival bid as election rhetoric.

"Let's try not to create political propaganda," said Industry Minister Pierluigi Bersani. "We have a board, unions and possible buyers, let's leave them alone to work."

The Franco-Dutch carrier had earlier insisted it would throw in the towel if unions and other stakeholders did not drop their resistance to the deal by March 31, but appeared to soften its stance on the deadline and job cuts at a meeting with unions.

Air France-KLM's new plan on job cuts at Alitalia will be sent to the unions after the French carrier holds a Thursday board meeting. Talks with the union groups resume on Friday.

"The opening of dialogue with Air France-KLM, giving up its talk of an ultimatum, is the first result we've obtained," the UGL union said in a statement. "But it's obvious that there is work to be done so the final verdict can't be taken as a given."

Alitalia's pilot unions, however, are opposed to the deal over plans to shut down the airline's loss-making cargo unit.

Despite Alitalia's long list of troubles -- from difficult unions to tough competition from low-cost carriers -- the airline controls the lucrative Milan to Rome route and offers a foothold in Italy, where millions of tourists arrive each year.

Air France-KLM is betting it can restore the carrier -- which it is picking up for just two days' worth of revenues in a share swap offer -- to a profit in two years. It will also buy back its bonds and pump in EUR1 billion in a capital increase.

But it still faces opposition from Milan's airport operator, which has lodged a USD$2 billion lawsuit against Alitalia over plans to cut flights at Malpensa Airport, and a potential veto from Italy's next government should Berlusconi win the election.