Brussels - The European Union's executive on Tuesday approved an Italian scheme for bailing out troubled banks valued at up to 20 billion euros (28 billion dollars), officials confirmed.

The bailout scheme, which would allow the Italian government to buy into banks unable to weather the global financial crisis, meets EU rules on competition because it is limited in time and scope, the European Commission said in a statement.

As such, it is an "adequate means to restore a serious disturbance of the Italian economy," the statement said.

The decision, which was taken after "intensive" negotiations with the Italian government, allows Rome to deploy "around 15 to 20 billion euros" to bail out troubled lenders, but only if they can prove that they are "fundamentally sound", the statement said.

Under the EU's strict rules on state aid, the Brussels-based commission has to make sure that any help which governments give to struggling industries or businesses does not give the recipient an unfair commercial advantage.

In recent months, the EU executive has dealt with a string of cases as EU member states have scrambled to offer their national lenders a range of guarantees. (dpa)