The deal could value Alitalia's successor at 450-480 million euros ($475-$505 million) and Lufthansa would get a stake of 55-60%, the Italian newspaper added.

ITA Airways was not immediately available for comment. Lufthansa declined to comment.

Italy new government reopened ITA's privatisation process last month after an exclusivity period for talks with U.S. private equity fund Certares, Air France-KLM and Delta Air Lines failed to produce a deal.

Lufthansa firmly believes it will succeed, a person with knowledge of the situation said, adding that there is no other bidder around.

It remains to be seen whether a strategic partner from Italy will be involved, the source added.

Corriere della Sera reported that Italy is trying to involve state railways Ferrovie dello Stato in the deal.

ITA has kicked off a plan to hire 1200 new employees in 2023, when the carrier will add 39 new aircraft to the 65 it already has.

($1 = 0.9474 euros)

(Reporting by Ilona Wissenbach in Berlin, additional reporting and writing by Elisa Anzolin in Milan; Editing by Keith Weir)