A court in Rome ruled on Thursdaythe Italian government's plan to lend 3.9 billion euros totroubled lender Banca Monte dei Paschi di Siena can go ahead, asource close to the matter told Reuters.
The administrative court rejected an attempt by the consumerrights' association Codacons to have the loans blocked, said thesource. The ruling clears a hurdle to the financial help for thescandal-hit bank.
Codacons, which wants the world's oldest bank to benationalized, is likely to appeal the decision to a highertribunal, known as the State Council.
The Rome administrative court will make its decision publicon Friday, said the source, who asked not to be named.
The Tuscan lender was forced to request state aid last yearafter failing to meet tougher capital requirements set by theEuropean Banking Authority.
Under the bailout scheme, Monte dei Paschi is due to issue3.9 billion euros ($5.16 billion) of bonds to the Italiantreasury by March.
Italy's third largest lender said earlier this month that itfaces losses of 730 million euros from opaque derivatives tradescarried out in 2008-2009 which are at the center of a legalprobe into alleged fraud and corruption.
The scandal has triggered a political storm ahead of anelection on Feb. 24-25 because of the lender's close ties to thecenter-left Democratic party (PD).
A document filed to the court by Codacons has challenged theaccounting of the trades and estimates a larger loss of between1 billion and 1.5 billion euros.
The consumer body alleges that Italy's central bank failedin its oversight of the bank. Monte dei Paschi and theBank of Italy, which has said Codacons' allegations are false,declined to comment on the consumer group's estimates ofpotential additional losses.
Among a spate of legal hearings on the case earlier onThursday Italy's audit court also ruled that the state loanswere legitimate.