UPDATE 1-Berlusconi to break with government in budget vote
* Berlusconi party to announce break with govt on Tuesday
* Letta govt expected to survive confidence vote
* Vote to expel Berlusconi from parliament expected Wednesday
By Paolo Biondi
ROME, Nov 26 (Reuters) - Silvio Berlusconi's party will vote against the government in a confidence vote over the 2014 budget and will announce its withdrawal from the ruling coalition, a source in his Forza Italia party said on Tuesday.
Prime Minister Enrico Letta is expected to survive without Berlusconi's support, but the vote has brought the clash between the two to a head a day before the Senate is expected to strip the four-time premier of his parliamentary seat after his August tax-fraud conviction.
A broad left-right coalition, formed after February's deadlocked national election, has backed Letta since April. Berlusconi, however, prompted a split in his party when he tried and failed to bring down the government last month.
The rift has left 30 centre-right senators and 27 deputies supporting the government, which is enough to guarantee its survival at a vote scheduled to happen after 9 p.m. (2000 GMT).
The coalition government "has failed in all its missions," media magnate Berlusconi said during an interview with one of his TV channels.
The budget, the object of intense negotiations between coalition partners, includes some tax cuts on labour costs but the European Commission has warned it might not achieve debt reduction targets.
European Commission President Jose Manuel Barroso called Berlusconi on Tuesday to urge him to remain by Letta's side, but his plea probably fell on deaf ears, a Forza Italia lawmaker told Reuters.
Tensions are running high ahead of a bid to expel the four-time premier from the Senate. The vote, for which Berlusconi has called street rallies to protest, is expected late on Wednesday.
If ejected from parliament, Berlusconi will lose immunity from arrest and from being wiretapped by investigators as he faces at least two other criminal probes and appeals a conviction for paying for sex with an underage prostitute.
Confidence votes limit the scope for time-consuming amendments and are regularly called to speed legislation. It is just one part of the budget's passage through parliament, which must be completed by the end of the year.
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