Niki Lauda preparing bid for Air Berlin's Niki unit

MONZA, Italy (Reuters) - Former motor racing driver Niki Lauda is working on a bid to buy back the Niki subsidiary of insolvent airline Air Berlin, he told Reuters on Sunday.

Air Berlin, Germany's second-largest airline, filed for bankruptcy protection last month after shareholder Etihad Airways withdrew funding following years of losses.

Now the carrier is to be carved up, most likely among several buyers, with about 140 leased aircraft and valuable take-off and landing slots in Germany up for grabs.

"I am preparing a plan to bid for Niki which has to go in there by the end of the week. But I have not decided yet under what conditions I will do it," Lauda told Reuters on the sidelines of the Italian Grand Prix in Monza.

Bidders for the assets must submit offers by a Sept. 15 deadline, and a decision could come on Sept. 21, three days before the German national election.

Lauda said he had started looking at Niki's accounts, with more documents due to come on Monday and Tuesday before he can take a final decision.

German airline Lufthansa has government backing to take over large parts of Air Berlin. Britain's easyJet and Thomas Cook's Condor are also seen as likely bidders.

The carrier is being kept in the air thanks to a 150 million euro ($178 million) government loan, which government officials say will last the airline for up to three months.

(Reporting by Alan Baldwin, writing by Emma Thomasson; Editing by Susan Fenton)