* Grillo's movement elects mayor in Parma in stunning victory
* Former comic campaigns for Italy to default and quit euro
* Says Parma is a stepping stone to 2013 national vote
* Movement snubs TV and organises through Internet
By Gavin Jones
ROME, May 21 (Reuters) - Italy's political parties had hoped Beppe Grillo would fade away, but the comic who rails against their corruption and ineptitude and says Italy should default on its debt and quit the euro is going from strength to strength.
In local elections on Monday, Grillo's Five-Star Movement shook Italian politics by winning control of the northern city of Parma and several smaller towns, capitalising on voter discontent with economic stagnation and austerity.
Increasingly popular at a time when support for mainstream parties is slipping, the protest movement - Grillo insists it is not a "party" - campaigns to clean up politics and business, promote clean energy and dismantle monopolies and privileges.
It has a mastery of the Internet and social media that is light years in advance of any of the traditional parties.
Polls say the movement has become Italy's third largest political force and its growing impact echoes the success of outsiders elsewhere in Europe, as the economic crisis has eaten away at the credibility of old-style party systems.
In prosperous Parma, famous for its ham and cheese, the movement's candidate Federico Pizzarotti exceeded all expectations by coming from behind in a run-off ballot to take around 60 percent of the vote against his centre-left rival.
In typically aggressive style Grillo, 63, said Parma was the "Stalingrad" of the parties, a reference to a decisive defeat for Hitler in World War Two, and warned that their definitive "Berlin" would come at next year's national vote.
Political scientist James Walston of the American University of Rome, called the result "a real slammer" and said the traditional parties would have to try to "rebrand and re-present themselves" if they wanted to halt Grillo's ascent.
With his mane of unruly white hair and beard, Grillo lays into left- and right-leaning parties alike, as well as the technocrat government of Mario Monti. He has dubbed the understated Monti "Rigor Montis", and says he represents the interests of banks rather than citizens.
He made his name as a stand-up comedian in the northern city of Genoa, but is now far better known for his vitriolic attacks against the ruling classes, usually delivered in a frenzied, hoarse voice before thousands of followers in Italy's piazzas.
Grillo himself does not run for office, having been convicted for manslaughter after three passengers died when the jeep he was driving skidded off the road in 1981.
He never appears on political talk shows and also bans his movement's candidates from doing so, to avoid them being associated with the "zombies" representing traditional parties.
The average age of the four mayors elected by the Five-Star Movement on Monday was 31, in contrast to the gerontocratic world of Italian politics.
According to Grillo, Pizzarotti's victory in Parma was achieved with a campaign budget of just 6,000 euros.
Having tried in vain to dismiss him as an "anti-political" demagogue, mainstream politicians have recently begun to acknowledge him as a legitimate rival and even to claim affinity with his movement's goals.
Mariastella Gelmini, education minister under Silvio Berlusconi's former government, said Grillo's appeal to ordinary voters was reminiscent of media tycoon Berlusconi when he entered politics in 1994.
At its first political test in 2010 the Five-Star Movement, which organises itself through the Internet and social networks, won just 1.8 percent of the vote, rising to 3.4 percent at Milan's mayoral election the following year.
It is now credited with around 12 percent at the national level, making it a major force in Italy's highly fragmented political landscape ahead of national elections due next spring.
Grillo says Monti is driving Italy into poverty simply to try to pay back its 1.9-trillion-euro ($2.52-trillion) debt, the world's fourth-largest, which is mostly held by banks.
"If we had the lira, in one night we could write two lines on a piece of paper and devalue by 30 percent, and then we could all start over. As things are now, we can't make it," Grillo told Reuters in a recent interview.
While Grillo's powerful invective and rhetorical skills make him an ideal front man, many analysts point out that his movement's followers, often young professionals, tend to be far more down to earth and pragmatic.
"Beppe Grillo is our megaphone, the citizens of parliament elected me and certainly not Beppe Grillo," said Pizzarotti.