Europe's low cost airlines expressed concern on Monday that the European Union's exective commission is preparing to approve a series of Italian state proposals to restructure the national carrier Alitalia.

"This is extremely concerning and the approval of these proposals would amount to a clear reversal of the commission's firm stance on state aid," the European Low Fares Airline Association (ELFAA) said in an open letter.

"Such approval would also set a dangerous precedent as other national airlines struggling to compete in the liberalised market will expect to receive equal treatment," it said.

Alitalia is 62.3 percent state-owned and is in a major crisis after posting new losses in 2004. Rome's proposals would see it split in two with flight operations handled by AZ Fly and ground services operated by AZ Services.

ELFAA, which is a lobby group of 10 low-cost airlines, said the restructuring plan is "a blatant infringement of state aid rules" which amounts to three billion euros (3.8 billion dollars) of illegal aid.

It fears the commission could vote on the proposals, which include a 1.2 billion euro recapitalisation of AZ Fly, early next month and that the body might ignore its complaints and those of other national operators.