Italy's industry minister Antonio Marzano told Fiat executives that Fiat Auto needed deep and definitive restructuring if it is to meet its aim of slashing net debt to $3.6bn by 2003. Marzano's comments were made in this week's preliminary meeting to discuss approval of Fiat's restructuring plan to lay off more than 8,000 workers for at least a year.

"But the plan also needs to find a way to limit the social impact," he told the gathering, which forms a precursor to the crucial December 5 meeting with PM Silvio Berlusconi, at which the final decision must be made to approve the plan.

The first wave of planned layoffs has been delayed pending negotiations with the unions. The unions have kept up the pressure on the carmaker by holding strikes across Italy.