The International Monetary Fund denied Monday, November 28, it was holding talks with Italy about a financial aid package to prop up the European country's economy.

"There are no discussions with the Italian authorities on a program for IMF financing," said a one-sentence statement released by an IMF spokesperson, who was not identified.

The denial followed a report by the Italian newspaper La Stampaalleging that the fund could bail out Italy with up to 600 billion euros ($800 billion) in aid.

According to the report, the money would give Prime Minister Mario Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt."

La Stampa said the IMF would guarantee rates of 4.0 percent or 5.0 percent on the loan -- far better than the borrowing costs on commercial markets, where the rate on two-year and five-year government bonds has gone above 7.0 percent, AFP reported.

Italy needs to refinance about 400 billion euros in debt next year.