A Financial Times report carried by the National Post said that Fiat Auto is ready to lay off 5,600 workers next Monday after the Italian government on Tuesday failed to broker an alternative plan between the troubled car maker and angry trade unions.

The report said that labour leaders were left with no resolution after meetings with Antonio Marzano, the Industry Minister, who has been one of several government members pressing Fiat to reduce the layoffs and speed up its investment plans.

The government on Thursday is expected to reluctantly approve Fiat’s request that the job cuts commence next week under a ‘crisis’ scenario that permits Fiat Auto to use special industry-financed funds for layoffs that last up to one year, the FT report said.

Marzano, reflecting the government’s unease and confusion at failing to help laid-off workers, reportedly revived the possibility the state could one day buy a stake in the car maker to save it from being sold.

“Such a hypothesis can’t exclude the fact that there needs to be another business plan,” Marzano said, according to the report, which added that, hours later, Prime Minister Silvio Berlusconi said he hoped “a solution won’t need state intervention.”

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The report said the layoffs will begin a week later than originally scheduled, and will include all 1,800 workers at Fiat Auto’s plant in Termini Imerese, Sicily. Another 2,000 long-term layoffs are planned for next July.

Trade unions have made Termini a rallying point for almost daily strikes against Fiat plants since the carmaker announced the lay-offs, the FT report noted.