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Italy's Infrastructure Minister Antonio Di Pietro said the offer was "harmful" and one union leader called it "an unconditional surrender."

Alitalia's board Friday accepted the offer, which was less than 20 percent of the airline's share value.

KLM has also agreed to underwrite a $1.5 billion increase in capital and buy $958 million of Alitalia's bonds. But, the takeover, which needs to be approved by unions and the Italian government after next month's elections, would mean a cut of about 1,600 job, EuroNews.net reported.

Accepting the offer of $217 million sent shares values of Alitalia stock tumbling so fast trading the stock was temporarily halted, the report said.

Analysts said the airline is facing liquidation if the offer the government and unions don't approved the sale.

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