An US$8.7 billion takeover bid by a private equity consortium for Qantas Airways will be subject to vigorous scrutiny to ensure the airline remains under Australian control, Treasurer Peter Costello said.

Qantas directors have recommended shareholders accept the offer from Airline Partners Australia (APA) but the sale has been met with alarm by unions and politicians amid fears it amounts to a foreign takeover of an iconic Australian firm.

The Australia's finance minister moved to allay those fears by insisting the nation's Foreign Investment Review Board would scrutinize the deal to ensure the flying kangaroo remained in Australian hands.

The airline, which remains one of the world's most profitable for its size, is subject to a 49 percent ceiling on foreign ownership and a 25 percent limit on any single foreign shareholding.

"The requirement is that Qantas will remain under Australian control and that will be enforced," Costello told reporters in Canberra.

The government would require Qantas to have majority Australian ownership, be under Australian control, be located in Australia and continue to serve important domestic and regional routes, he said.

"There is a power to disallow a proposal if it is contrary to Australia's national interest," Costello added.

Bob Mansfield, who heads the consortium of domestic and foreign companies bidding for the takeover, said the deal had been submitted to the Foreign Investment Review Board to "put some calmness into this situation".

'Not A Normal Company'

"The reality is, it's not a normal company. Additional scrutiny was something we expected," he said.

The takeover consortium is led by Australia's biggest investment bank, Macquarie, and includes US private equity giant Texas Pacific Group, Canadian investor Onex, and Australia's Allco Finance Group and Allco Equity Partners.

Under the takeover proposal, Allco Equity will be the largest stakeholder with 35 percent, Allco Finance will have 11 percent, Macquarie Bank 14.7 percent and Onex Corp 9 percent.

Texas Pacific and other foreign investment funds will each have less than 15 percent.

Bruce Baird, a backbencher in the conservative government of Prime Minister John Howard, said the consortium needed to give the public some guarantees.

"Guarantees that we're not going to see the maintenance (jobs) moved offshore to China, guarantees that we're not going to see more backroom work carried out in India, that we're not going to see more flight attendants recruited in Asia and also we're not going to see regional services cut in Australia," he told ABC radio.

The consortium said while APA wanted to expand the airline's business, it could not give an ironclad guarantee on Qantas jobs.

"We can't guarantee jobs because I don't think any employer can," Mansfield told commercial radio.

"As things change, you've got to adapt to that but our single focus on this whole exercise we're looking at with Qantas is to grow the organization with 70 more planes and a 40 percent bigger network at the end of the five to six years. If that happens, jobs will grow."

The consortium has committed itself to continuing regional services and safety and maintenance levels, and to not breaking up the airline. Mansfield said some of these assurances could become conditions of the sale.