Berlusconi urges Italian president: call polls now

ROME (Reuters) - Opposition leader Silvio Berlusconi called for immediate elections at a meeting with the Italian president on Tuesday, seeking a return to power after the collapse of the centre-left government last week.

With the centre left -- including President Giorgio Napolitano, a leftist -- favoring an interim government to reform electoral laws before Italy votes again, it was hard to see a way out of the deadlock.

"How can you think of putting on hold a country which needs a real government urgently, while we look for something on which there is not even a remote chance of finding a common platform today?" Berlusconi told reporters after the meeting.

Walter Veltroni, head of the Democratic Party which is the main rival on the left for Berlusconi's Forza Italia, told Napolitano elections should be held by June, or even as late as spring 2009, after deep political and economic reforms.

"Elections now mean instability tomorrow," said Veltroni.

Napolitano met leaders of the biggest parties on the fourth and final day of crisis talks. After a last meeting at 1700 GMT, he may ask someone like Senate Speaker Franco Marini to try to form an interim government, or he could say he needs more time.

One political source close to the talks said there was no clear majority in favor of quick elections for the lower house and Senate, meaning Napolitano was more likely to try to appoint an interim administration.

"At the moment the political parties asking for an early election don't add up to a absolute majority," said the source.

He listed Forza Italia, the National Alliance and Northern League on the right, and one communist party, as favoring a snap poll.

CONFIDENCE SAGS

The collapse of Prodi's government was triggered by the defection of a small party that robbed him of his majority in the Senate, where he lost a confidence vote on Thursday, and it came at a sensitive moment for the euro zone's third largest economy.

New data showed Italian business confidence had hit its lowest since end-2005 -- when Berlusconi was in power and the economy was stagnating -- and a think-tank trimmed its growth forecast for 2008 to 0.9 percent from 1.4 percent.

Analysts say that if Berlusconi has his way Italy would go to the polls under the same rules which many blame for making Prodi's 20 months in office so difficult.

Some economists worry another free-spending Berlusconi government will undo Prodi's work on cutting the budget deficit.

With pre-crisis polls putting him 10 points ahead of Prodi, Berlusconi has reason to sense victory if he can fight an election while Prodi's defeat is still fresh in voters' minds.

The media tycoon and his allies argue electoral reform can be discussed later.

Outgoing Deputy Prime Minister Francesco Rutelli said there were "no longer any coalition ties" binding the nine parties that took Prodi to a narrow victory in a 2006 election and then proceeded to bicker over every area of policy.

"Enough of coalitions that are too wide," said Rutelli. "It doesn't mean we won't make alliances, but that we will only do so with people who share our vision."

(Writing by Stephen Brown; additional reporting by Gavin Jones, Phil Stewart and Francesca Piscioneri; Editing by Robert Woodward)