For philosopher and writer, Umberto Eco, it was a "magical instrument" that could transport him to "faraway seas". For Audrey Hepburn and Gregory Peck in the 1953 film, Roman Holiday, it was an invaluable aid in authentic scene-setting. For a whole post-war generation of Italians it represented their first blast of travel freedom as they noisily revved down the road, leaving the misery of the war years behind.

"It", of course, is the Vespa, the world's best selling, best known and most loved scooter made by the Tuscany-based company Piaggio. The news that Piaggio seems set to become the latest jewel in the Italian industrial crown to come under foreign control has not only prompted a virtual tidal wave of nostalgic soul searching but, perhaps more importantly, seems to have sounded yet another death knell for old-style Italian family capitalism.

As details of the £480 million (#610 million) takeover bid by US investment company, Texas Pacific Group, emerged, commentators openly mourned the passing of an age when the Vespa seemed synonymous with an easy-going all-Italian lifestyle. Economists retold the 50-year-old success story of a company which, since launching the Vespa in 1946, has sold 16 million scooters worldwide and which now controls 32 per cent of the world market.

Designed by an inspirational aeronautical engineer, Corradino D'Ascanio, at the request of the aircraft manufacturer, Enrico Piaggio, the Vespa proved revolutionary. Supporting arms on the wheels for easier tyre changes, gear levers on the handlebars and the whizz of hiding the engine and its dirty chain all meant that the Vespa appealed to those who wished to ride a scooter without getting their clothes dirty.

Restructuring in 1996 and 1997, involving 1,430 redundancies, halted a recent negative run meaning that Piaggio last year had a turnover of £726 million, returning a pre-tax profit of £4 million. Those figures, however, are unlikely to save Piaggio from being sold to Texas Pacific, a group which in 1996 bought another Italian motor-cycling icon in Ducati, famous for its powerful road bikes.

While editorialists and intellectuals wept over the hot keyboard, hardheaded analysts were more worried about future implications, pointing out that Piaggio could join a lengthening list of successful, formerly family-run Italian firms now controlled by foreign groups. The list includes such as Gucci (leather and fashion goods), Martini (alcoholic drinks), Cinzano (alcoholic drinks), Lamborghini (sports cars), Ricordi (musical industry), Ras (insurance), Ducati (motorbikes) and Buitoni (pasta).

Many of the above were sold for the same reason that Piaggio will almost certainly be sold. Namely that the medium-sized companies which fuelled Italy's remarkable post-war economic miracle were developed as (and have essentially remained) family-run businesses. As we get to the end of the millennnium, such firms find it hard to compete on the global marketplace, being unable to raise the sort of capital that comes easily to global investment groups such as Texas Pacific.

Furthermore, nearly all of these firms have tended to rotate around their all-powerful founding father. When he dies, then problems about the future management of the company present themselves, sometimes leading to such bitter squabbling amongst the family heirs that the company's performance begins to decline dramatically, making it ripe for takeover. To some extent, this was what happened with Gucci, for example.

The family folk at Piaggio are not squabbling amongst themselves but the extent to which the company's shares are distributed amongst members of two of Italy's great industrial dynasties - the Piaggio family and the Agnellis, owners of car giant, Fiat - does not help with regard to future planning, investment and capitalisation.

When Umberto Agnelli, grandson of the founder of Fiat, married Antonella Becchi Piaggio, daughter of Enirco Piaggio, it seemed like a matrimony designed along the best possible corporate lines. When their son, Giovanni Alberto Agnelli, emerged as one of the most suave, open-minded and forward-looking businessmen of his generation, then the future of Piaggio seemed assured.

Giovanni, or "Giovannino" as he was known by Italian media in order to distinguish him from his famous uncle, former Fiat president, Gianni, already appeared to have engineered a turnaround at Piaggio when he was struck down with cancer, dying in December 1997 at the age of only 33. With Giovannino's death, Piaggio was left in the hands of three branches of the Agnelli family and four branches of the Piaggio family. In short, the Piaggio shareholding is extremely fragmented.

The tragic impact of Giovannino's premature death, allied to the fragmented family holdings, has undoubtedly made it easier for the Piaggio and Agnelli families to sell out. Until last week, too, it had seemed that Texas Pacific had the deal all to itself, given that the two families seem to have agreed on the sale.

Montreal-based Bombardier, an aircraft, rail car and snowmobile manufacturer, was tipped as a potential buyer but it announced that it had "no interest" in the deal. However, just when all seemed over bar the shouting, up stepped GE Capital, the financial arm of the US conglomerate General Electric, saying that it wants to dissuade Piaggio from accepting the Texas Pacific offer.

Media speculation suggests that GE Capital's interest in Piaggio might be coming from much nearer home, claiming that its bid may well be sponsored by a whole range of Italian groups including Banca di Roma, Banca Commerciale, Monte dei Paschi as well as industrial families such as Moratti (petrol), Pirelli (rubber) and Benetton (clothes wear).

All the best inside information says that Texas Pacific will still carry the day but were GE Capital's bid unexpectedly to prove successful, then it would represent a counter-tendency and a shot in the arm for Italian capitalism, even if a consortium of Italian buyers put together by a US conglomerate were still light years away from the days of "padre, padrone" family firms. For some commentators, however, the future for Italian capitalism as outlined by the sale of Piaggio is grim.