Italy set for early election, Berlusconi ahead

By Silvia Aloisi

ROME (Reuters) - Italy faces an election by mid-April which could return media magnate Silvio Berlusconi to power after he blocked attempts to form an interim government.

President Giorgio Napolitano summoned the speakers of both houses of parliament on Tuesday and is expected to dissolve parliament by Wednesday. By law, he would then have to call an election within 70 days.

April 13 is seen as the most likely poll date, just two years after Romano Prodi narrowly beat Berlusconi in the last election.

"Here we go: to the polls," read the front cover of daily Il Giornale, owned by Berlusconi's brother Paolo.

Italy plunged into crisis after Prime Minister Prodi was forced to quit last month by defections in his centre-left coalition.

Reluctant to send Italians back to the polls, Napolitano asked the speaker of the Senate (upper house), Franco Marini, to see if he could muster enough support for a temporary government to reform the electoral system.

But Berlusconi, 71, sensing a return to the post of prime minister he has held twice before, demanded a snap election.

After four days of talks with political leaders, Marini told Napolitano on Monday he had failed to find a majority backing an interim administration.

Berlusconi's centre right has had a consistent lead in surveys of voter intentions. On Monday, after reiterating his "No" to Marini, he said he had a lead of 10-16 points over the centre left, which will be led to the polls by Rome's 52-year-old mayor Walter Veltroni.

"LIKE OBAMA"

Veltroni had supported an interim government to change voting rules that were widely blamed for the fragility of Prodi's government, Italy's 61st since World War Two.

He now faces an uphill fight against Italy's richest man, but refuses to be written off just yet.

"I don't believe the doom-sayers nor opinion polls. Look at (Barack) Obama -- three months ago nobody would have bet on him, now look where he is," said Veltroni, comparing himself to the Democrat fighting to become America's first black president.

Many economists say another government elected under current electoral rules will prove just as unstable as Prodi's, who had been in power for only 20 months and was undermined by constant bickering between Catholic and communist allies.

Some analysts also worry another free-spending Berlusconi government will undo the centre-left's work on cutting the budget deficit.