BERLIN, Feb 10 (Reuters) – The German government is discussing a bailout package that could see Berlin take equity stakes worth up to 500 million euros ($607 million) in several airports hit by the COVID-19 pandemic, two people familiar with the talks said on Wednesday.

Transport Minister Andreas Scheuer last year proposed a rescue package worth 1 billion euros for airports hit by plummeting passenger traffic. After some resistance, regional state governments agreed to shoulder 500 million euros of that.

The rest would have to come from the federal government, but the finance ministry does not see unconditional aid for airports in the form of grants as an appropriate solution, one of the sources said.

Finance Minister Olaf Scholz is prepared to bail out large airports on condition Berlin receives equity stakes in return, both sources said.

Smaller regional airports would not be included in the federal bailout package, the first source added.

Talks are still ongoing, the other person said, adding that it was unclear whether a deal would be reached and which airports would qualify for federal support.

German business daily Handelsblatt, which earlier reported the proposal, cited ministry sources as saying airports in Duesseldorf, Hamburg, Hanover, Leipzig and Stuttgart could receive state aid if stakeholders agreed to the idea.

The federal government already holds stakes in the airports of Berlin, Munich and Cologne/Bonn.

A senior member of Chancellor Angela Merkel’s conservatives said budget lawmakers were surprised by Scholz’s willingness to support a state aid-for-equity deal as he had previously rejected any federal government participation.

A federal bailout including equity stakes would also raise questions regarding EU competition rules and how future losses would be handled, the conservative party member said.

Airports association ADV rejected the idea of linking state aid to state equity stakes. It estimates that German airports will lose a total 3 billion euros in 2020 and 2021.

A finance ministry spokeswoman declined to comment.

A transport ministry spokesman said senior officials discussed the matter on Wednesday and agreed to continue talks in the coming days. ($1 = 0.8241 euros) (Reporting by Michael Nienaber, Ilona Wissenbach und Markus Wacket;Editing by Elaine Hardcastle)