BUENOS AIRES: Argentine lawmakers Wednesday approved a draft law to seize back the country's largest airline Aerolineas Argentinas and its subsidiary Austral from its owners, the Spanish group Marsans.

The draft law designates the two companies a "public utility" and was approved by a vote of 152 in favour and 84 against with one abstention. The bill now goes before the Senate for approval.

The move is the latest in a long-running dispute with Spain over the fate of the embattled airlines, which have racked up debts of around US$890 million.

The Argentine government and Marsans signed a deal in July to re-nationalise Aerolineas and its domestic subsidiary Austral, which Marsans bought into seven years ago for a symbolic dollar.

The agreement called for a third party to assess the airline's value if Argentina and the Madrid-based firm failed to agree on a price by mid-November.

But Argentina has not sought a third-party valuation and an Argentine parliamentary commission instead recommended that Argentina simply expropriate both airlines, arguing they were worthless.

Argentine Transport Secretary Ricardo Jaime said an Argentine court had valued Aerolineas at minus US$600 million because of debts the troubled airline had run up since being privatised in 1990.

But Marsans, which holds a controlling 94.4 per cent in the carrier, said a study by Credit Suisse bank showed the value of the airline and Austral is between US$250 million and US$450 million.

The Argentine government, which holds a five-per-cent stake in the airline, was forced to inject US$183.5 million into Aerolineas this year to keep it operating and pay its 9,000 employees.

Marsans has been sharply criticised for its management of the airlines, and 28 of their 70 planes are mothballed on the tarmac.

- AFP/yb