Vienna - Austria's government is set to extend the privatization process of Austrian Airlines AG and is ready to take over more than half of the carrier's debt, Austrian news agency APA reported Monday.

As demanded by the only remaining bidder, Deutsche Lufthansa AG, the state was ready to shoulder up to 500 million euros (631 million dollars) of the flag carrier's debts of around 900 million euros, APA wrote, citing unnamed government sources.

The government's mandate to privatise its 42.75-per-cent stake in Austrian Airlines was scheduled to run out Tuesday, but the process was likely to be prolonged until Dec.
31, the sources said.

Lufthansa is offering only a symbolic price for Austrian Airlines, with an option of paying more once the ailing carrier has recovered, according to Austrian media reports. (dpa)