(Adds Marzano on Fiat Auto net loss, Colaninno)
MILAN, Jan 28 (Reuters) - A spin-off of Fiat Auto plus a five billion-euro recapitalisation of the struggling carmaker would boost the value of the rest of Fiat, according to the CEO of one of the group's top creditor banks.
"If we separate the car (unit) and recapitalise it with five billion (euros) the rest will be worth more too," Banca Intesa Chief Executive Corrado Passera told Corriere della Sera on Tuesday, referring to a widely expected rescue plan for Fiat.
A spokeswoman for Intesa confirmed Passera's remarks.
He also said a spin-off would simplify Fiat's relationship with General Motors Corp , which already owns 20 percent of the car unit, and make it easier for possible new financial partners to choose where in Fiat to invest their cash.
Slumping car sales and high cash burn have pushed Fiat Auto deep into loss, dragging the rest of the group behind it.
Industry Minister Antonio Marzano told a Senate hearing that Fiat Auto's 2002 net result should "not be much beyond a loss of 2.0 billion euros", a number Fiat gave in November. Fiat Auto's operating loss is expected to come in at 1.3-1.4 billion euros.
Last week, Fiat Chairman Paolo Fresco confirmed the company and its creditor banks were considering splitting up the energy-to-engine parts group as a way of attracting new capital.
Various Italian entrepreneurs have been floated as possible new investors in the fallen industrial icon, including former Telecom Italia raider and chief executive Roberto Colaninno.
Marzano said Colaninno would invest 2.5 billion euros in Fiat or its car arm -- an amount already reported by media -- and said his plan should be studied at Fiat's next board meeting which newspapers reported could be on Friday.
GM SALE NOT INEVITABLE
In an interview with Corriere della Sera, Passera said a sale of Fiat Auto to GM would "no longer be inevitable" if the Turin-based group successfully relaunched its car arm. Fiat can force GM to buy its 80 percent stake in Fiat Auto from 2004.
Fiat's ties with GM would be vital for Fiat Auto's revival, said Passera, a key player in Fiat's strategy after Intesa and other banks handed it a three billion-euro loan last May.
GM and Fiat have cost-saving joint ventures to design and make engines and powertrains as well as buy car parts in bulk.
On Saturday, Rainer Masera, CEO of fellow Fiat bank Sanpaolo IMI said there was an "urgent need" to plan the future of Fiat, whose Honorary Chairman Gianni Agnelli died last week.
Immediately after his death, the remaining Agnellis pledged to raise 250 million euros by recapitalising their family trust Giovanni Agnelli & C Sapa, opening the way for more money to be called in down the chain through which they control Fiat.
Fiat shares have fallen close to 20-year lows this week on concerns that investors might be asked to contribute to the turnaround, barely a year after Fiat's last capital increase. On Tuesday they closed flat, in line with the European car sector.
Media and advisers have said Fiat could raise more money by selling its operations in India, China and Brazil -- once touted as the strategy for the future.
GM has first refusal on any Fiat Auto selloffs but Tuesday's Finanza e Mercati said the U.S. giant would only look at Fiat's operations in Brazil, where it is the market leader.
The paper said insurer Toro and truckmaker Iveco might also be spun off with Fiat investors being offered stock in the newly separated firms.