The IMF has prepared a rescue plan, worth 600 billion Euros to support the Italy in case the debt crisis worsens, as per La Stampa an Italian Newspaper citing the IMF officials.

The IMF loan would be between 400 to 600 billion euros, which would give Italy a window of 12 to 18 months to implement budget cuts and growth boosting reforms "by removing the necessity of having to refinance the debt" La Stampa reported.

The IMF would guarantee rates of 4.0 percent or 5.0 percent on the loan -- far better than the borrowing costs on commercial debt markets, where the rate on two-year and five-year bonds has risen above 7.0 percent.

The size of the loan would make it difficult for the IMF to use its current resources so different possibilities are being explored including possible action with European Central Bank in which the IMF would be the guarantor. 

Italy's 1.9-trillion euro ($2.5-trillion) public debt and low growth rate have spooked the markets in recent weeks, prompting concern that it could have to seek a bailout like fellow eurozone members Greece, Ireland and Portugal.

On Thursday, the yield on the Italian bonds rose back above 7 percent on renewed worries over the eurozone after a meeting between Germany, France and Italy highlighted deep divisions on how to tackle the eurozone debt crisis.

Ahead of the talks, French President Nicolas Sarkozy called for the European Central Bank (ECB) to act as a lender of the last resort for the eurozone and issue bonds, a move strongly rejected by Germany.