Italy's Berlusconi faces confidence votes on December 14

Italy's Prime Minister Silvio Berlusconi briefs the media after an European Union leaders summit at the EU Council in Brussels October 29, 2010.

ROME (Reuters) - Italy's parliament will decide the future of Prime Minister Silvio Berlusconi's struggling center-right government on December 14 in two confidence votes that may trigger early elections, a political source said Tuesday.

The votes, in the lower house and the Senate, will not come until parliament has voted on the 2011 budget law, considered vital to guarantee the stability of Italy's public finances amid the mounting turmoil of the euro zone debt crisis.

The source was an official familiar with the process, who could not be named for reasons of protocol.

The day could be one of the most significant in the 74- year-old prime minister's long career and he is expected to give an interview on the main television station in his media empire Wednesday to outline his position.

His Senate majority is expected to ensure his survival in the upper house but defeat in the lower house, where he no longer enjoys a majority, would force him to resign.

On the same day, Italy's constitutional court is due to make a ruling that will decide whether he must face trial over charges which he has denied of bribing British lawyer David Mills to give false testimony to protect his business interests.

A decision on the timing of the votes had been closely awaited after supporters of Berlusconi's rival Gianfranco Fini pulled out of the government Monday following months of acrimonious internal wrangling.

President Giorgio Napolitano met Fini -- who is speaker of the lower house of parliament as well as head of the breakaway center-right FLI party -- and the speaker of the Senate Renato Schifani Tuesday, to discuss the parliamentary timetable.

FALLING POPULARITY

Berlusconi's political future has hung in the balance for months since he broke with his former ally Fini in the summer and expelled him and a group of supporters from the ruling PDL party they created together in 2008.

Fini commands the support of more than 40 deputies and senators, enough to topple Berlusconi's government if they vote with the center-left opposition.

Once a loyal partner, Fini has turned against Berlusconi, accusing him of running the government like one of the companies in his vast business empire and attacking him over a series of corruption scandals.

Berlusconi's approval ratings have fallen sharply, battered by a weak economy and problems that range from a long-running crisis over waste disposal in the southern city of Naples to an uproar over his dealings with a teenaged nightclub dancer.

The votes in parliament on December 14 will take the form of a no-confidence motion in the lower house brought by the opposition Democratic Party and Italy of Values Party and a Senate confidence motion brought by the government itself.

If Berlusconi loses, it will be up to Napolitano to decide whether to appoint a new prime minister with a mandate to try to form a new government to run business until elections scheduled in 2013, or to send the country to the polls early.

Opinion polls suggest that Berlusconi could return to power after an election but could lose control of the Senate, which would greatly hamper his freedom to pass new legislation.

(Writing by James Mackenzie; editing by Ralph Boulton)