Fiat is apparently looking to team up wth PSA Peugeot Citroen, according to an Italian newspaper.

Milano Finanza says the Italian prime minster's office has been looking into a potential aid package for the country's automakers by working with French president Nicolas Sarkozy on a possible partnership with PSA.

The prime minister's and president's offices have refused to comment on the report.

In the past PSA has said it is in favour of deepening existing relationships, although it wasn't looking to add another member to its alliance.