Troubled U.S. insurance company AIG is seeking another bailout and warns that if the government abandons the company it may cause a "catastrophic" collapse.

Bloomberg News said it acquired a 21-page presentation that outlined the consequences of allowing AIG to fail. The report said money-market funds -- seen as the safest investments -- could lose money, European banks would be forced to raise capital and AIG's competitors could be crippled.

"What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means," Bloomberg quoted the presentation.

The presentation was reportedly circulated among U.S. regulators and labeled as "strictly confidential."

AIG has already been rescued three times. In September, the Federal Reserve gave AIG an $85 billion credit line, then later increased it to $150 billion. Last week, the package was overhauled at more generous terms to AIG and increased by $30 billion.

By Adam Button and edited by Sarah Sussman
©CEP News Ltd. 2009