Silvio Berlusconi waits in wings as Italian poll nears end

By Phil Stewart

ROME (Reuters) - Italians have a last chance to vote on Monday in a two-day parliamentary election that could restore conservative billionaire Silvio Berlusconi as prime minister of a country on the brink of recession.

The 71-year-old media magnate should know within hours of polls closing at 3 p.m. (1300 GMT) whether he has seen off a challenge by 52-year-old centre-left leader Walter Veltroni and won a third term. Voting resumes on Monday at 7 a.m.

Both have pledged to reduce Italy's huge public debt, cut taxes and liberalize the highly regulated services sector.

Berlusconi, one of Italy's richest men and a fervent U.S. ally, led Veltroni in opinion polls before the first day of voting on Sunday but up to one in three of the about 47 million voters were expected to make their choice at the last minute.

Election laws make it hard for anyone to win a clear majority and many Italians doubt Italy's 62nd government since World War Two will revive the economy, stem big price rises on basic foods such as pasta and bread and lift national morale.

"Right now, Italy is like a flat tire," 79-year-old Renato Riccini said after voting in Rome on Sunday.

"The money is never enough, prices and taxes keep going up and it's a real battle to make ends meet. Even Alitalia is going belly up," he said, referring to the near-bankrupt national airline which has been up for sale for more than a year.

The last coalition government, led by the centre-left's Romano Prodi, barely survived 20 months before collapsing in January after a revolt by Catholic allies.

Some 62.5 percent of Italy voted on the first day of the election, Italy's Interior Ministry said. That was down from 66.5 percent after the first day of the last election in 2006.

SAVE US SILVIO?

Both candidates voted on Sunday. Berlusconi, a charismatic self-made billionaire, was applauded as he swept past voters, cast his ballot and kissed a three-year-old boy.

"Save us, Silvio," one voter shouted.

Veltroni, a former mayor of Rome, was characteristically low key when voting. He told reporters: "I hope it goes well."

Berlusconi, who was prime minister from 1994 to 1995 and from 2001 to 2006, stumbled at times in the campaign -- saying the left had "no taste in women" and insulting popular soccer player Francesco Totti for backing his centre-left rivals.

The winner's ability to head off a recession could be hampered by a complex election law, introduced by Berlusconi during his last government, which makes it hard to win a clear majority in the upper house.