Italy's UniCredit withdrew its takeover bid for smaller rival Banco BPM on Tuesday, blaming government intervention for scuppering the 15 billion-euro ($17 billion) deal.

In withdrawing, UniCredit cited complaints related to the golden power provision that allows the Italian government to impose conditions on corporate transactions.

Italy is working on a new decree which is set to reimpose most of its conditions for UniCredit SpA’s planned takeover of Banco BPM SpA, underscoring Rome’s continued resistance to the bid.