The European Commission has given the green light for Lufthansa’s take-over of Austrian Airlines, but with a series of conditions.

EU antitrust chief Neelie Kroes made the announcement following a series of talks with Lufthansa chief executive Wolfgang Mayrhuber.

A statement from the EU said: “Commissioner Kroes has instructed her services to draft a conditional clearance decision.”

The draft decision will be considered by EU member countries and a final proposal will be presented for adoption by the commission “as soon as possible,” the statement added.

The takeover will also receive a restructuring bail-out of €500 million from the Austrian government.

Lufthansa is offering €4.49 a share for AUA’s outstanding shares.

The EU had previously rejected several proposals over fears that the German carrier would monopolise routes between Vienna and other European cities, and from Switzerland, where it already owns Swiss International Air Lines.

In its latest offer, the airline said it would relinquish slots on five city routes flying out of Vienna to ensure that it passes the EC’s criteria.

Lufthansa set a July 31 deadline for EU approval as a condition of its tender offer to Austrian’s shareholders.

The commission sent out a questionnaire to Lufthansa’s competitors and other interested parties to see whether they think the offer made by Lufthansa was enough to remove competition bottlenecks identified in the commission’s investigation into the takeover.