The Swiss Federal government has lifted financial restrictions on telecoms operator Swisscom which could give it enough financial muscle to pursue the acquisition of Italian broadband company Fastweb.

Swisscom said the government which currently owns 66% of the group, had granted it "limited flexibility in terms of corporate acquisitions". The phone company will be allowed a maximum gearing of one a half times earnings before interest, tax and amortisation which equates to Sfr6.5bn (€4.2bn).