UPDATE 1- Berlusconi hints at radical plan for Fiat.

(From FT Investor (Stories))

Fiat Spa, Italy's largest industrial group, could retain control of its troubled car division but sell off virtually all its other businesses under a radical plan hinted at by Silvio Berlusconi, the centre-right prime minister.

The plan would involve Roberto Colaninno (pictured), a prominent Italian entrepreneur, acquiring a controlling stake in Fiat Spa, becoming the company's chief executive and trying to use his expertise as a turnaround specialist to revive Fiat Auto's fortunes.

From the Italian government's point of view, the plan would have the advantage of ensuring that Turin-based Fiat Auto remained in Italian hands and that Italy stayed a leading centre of car design and production, as Mr Berlusconi wants.

"I have spoken to many entrepreneurs and there is a possibility that Lingotto [Fiat] will remain Italian - not only Turin families but also groups that are ready and have the capacity and pride of being entrepreneurs," Mr Berlusconi said on Monday.

People close to the Fiat crisis said he was alluding to Mr Colaninno, a former chief executive of Olivetti, which he transformed in the 1990s from an ailing computer group into a telecommunications company.

At this stage Mr Colaninno's involvement in Fiat is only a possibility. It would be all but impossible ...