Washington  - With the clock running out on an April 30 Washington deadline, Fiat's head said Wednesday it would back out of a deal to take over Chrysler if autoworker unions, particularly those in Canada, don't agree to pay and benefit reductions.

Instead, Fiat Chief Executive Officer Sergio Marchionne said the Italian carmaker could seek another international partner or decide to buy up Chrysler assets at bargain prices if it declares bankruptcy.

"Our preference obviously is to find a solution" with the US Treasury, unions and lenders, Marchionne told reporters in Switzerland, Bloomberg news service reported. "Selling assets from a company that is in liquidation is not necessarily the best way to achieve value for any of the people involved."

Last month, struggling US carmaker Chrysler and Fiat announced a deal on a new partnership within hours after US government said the merger was the only way for Chrysler to keep its emergency loans.

Washington has loaned more than 4 billion dollars to keep Chrysler afloat, but set strict standards for viability for the automakers.

In late March, in an unprecedented intervention in the auto industry, US President Barack Obama said Chrysler could not survive without a partner and gave it 30 days to reach a deal with Fiat and show it was on a path toward profitability.

At the same time, General Motors, which has received more than 13 billion dollars, was given 60 days - until the end of May - to complete its own restructuring efforts. It was forced to replace its chief executive Rick Wagoner.

The Canadian government has also given Chrysler financial help.

Marchionne told Canada's Globe and Mail newspaper Wednesday that Fiat would look for another international partner if the unions don't cooperate.

"Absolutely we are prepared to walk," Marchionne told the daily.

Under the proposed deal, Fiat was to take a 20-per-cent stake in Chrysler, transfer green technologies and build some of its models for sale in the United States. If the deal goes through by the end of April, Obama would grant an added 6 billion dollars in loans to Chrysler.

Germany's Daimler continues to hold 20 per cent of the Chrysler, while the majority is held by Cerberus, a private equity firm. (dpa)