(ATHENS) - Greece is planning to privatise Olympic Airlines and Olympic Airways under the name Pantheon after getting an EU green light, Greek Transport Minister Costas Hatzidakis said Wednesday.

Hatzidakis unveiled a plan at a press conference including "a period of transition with the creation of a new company that will be called Pantheon" and will guarantee existing flights of the existing two firms.

The European Commission earlier Wednesday gave its approval for Greece's plans to privatise the airlines, but said 850 million euros (1.2 billion dollars) of illegal state aid must be returned.

Greece issued international offers to sell the airlines by the end of the year. The bids and selection process will be surveyed by a third-party proxy.

The investor or investors chosen will also be obliged to keep the name Olympic, the logo and the existing flight slots.

"The new investor will -- during a transition period -- have 49 percent of the company, while 51 percent will remain with Olympic Airlines until April 2009" when the new company would be put into place, said the minister.

"The government wants to conclude this pending issue with Brussels and proceed to the privatisation of the company, free from its debts, and with strong chances of success," he said.

Athens and Brussels have been at odds on the subject for years, with the commission regularly accusing Greek authorities of illegally bankrolling the company, founded in 1956 by late shipping magnate Aristotle Onassis.

The Greek government has spent years seeking private investors to take over Olympic Airlines, which is crippled with debt, but the process is complicated by the European Commission's demand that the company repay illegal state aid.

Last December the commission launched a fresh investigation into new Greek state aid to its ailing national carrier over aid received since the end of 2004.

The commission had already ordered Olympic Airlines -- the result of restructuring Olympic Airways in 2003 -- to repay hundreds of millions of euros in illegal payments.

"The Olympic Airways and Olympic Airlines cases have been a source of contention between the Commission and Greece since 1994," said Tajani.

"Even today in partially closing a further investigation we have found a further 850 million euros of state aid has been granted to these companies," he said.

"I strongly hope that with today's commission approval of the privatisation plan we send the message that we want a definitive break with the past."

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