[BUENOS AIRES] Argentina's government yesterday signed an accord to buy back troubled national flagship carrier Aerolineas Argentinas from its Spanish owners, officials said.

The deal, with Spain's Marsans group which held a controlling 94.4 per cent share of the airline, will see the government take on Aerolineas Argentinas' staggering US$890 million debt.

That sea of red ink, racked up since the company was privatised in 1990, had threatened to down the airline, which has 40 per cent of its fleet grounded, government officials and unions said.

The transfer of ownership was signed by government officials and Marsans representatives in the economy ministry here.

Argentina's government held just 5 per cent in the airline before the deal, which was announced last week after months of negotiations and, reportedly, much arm-twisting by Buenos Aires.

The accord - whose value has not been divulged - gives the state 99.4 per cent of the airline. The remaining 0.6 per cent is held by employees, though Argentine Transport Secretary Ricardo Jaime has said that too will be purchased to completely renationalise the company.

Argentina has been embarking on a general renationalisation programme since recovering from its 2000 financial collapse. Water, postal and railway companies have all been put back under state control. -- AFP