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UPDATE 2-Italy minister faces no-confidence vote over Pompeii

* Minister has refused to resign after Pompeii collapse

* Motion threat comes at bad time for Berlusconi

* Fini bloc position could be decisive

(Adds comment from Berlusconi’s top aide, bond spreads)

By Philip Pullella

ROME, Nov 10 (Reuters) - Italy’s opposition said on Wednesday it would present a no-confidence motion against one of Prime Minister Silvio Berlusconi’s most loyal ministers, in another blow for the already wounded premier.

Culture Minister Sandro Bondi has so far dismissed calls to step down over the collapse last Sunday of the 2,000-year-old “House of the Gladiators” in the ruins of ancient Pompeii, buried by an eruption of Mount Vesuvius in 79 AD.

He was forced to acknowledge that more buildings at the UNESCO world heritage site south of Naples may collapse.

Bondi, one of three national coordinators of Berlusconi’s People of Freedom (PDL) party, said it would be wrong for him to quit over what he said were long-standing problems at the site.

The opposition blames official mismanagement and funding cuts under the current centre-right government for the dire state of the archaeological site.

The no-confidence threat against Bondi by the largest opposition group, the Democratic Party, presents Berlusconi with a no-win situation. His coalition would be weakened whether Bondi resigned or if he had to face a no-confidence motion.

Berlusconi no longer has a majority in the lower house since Gianfranco Fini, his one-time ally and now most bitter rival, formed his own party, the Freedom and Future for Italy (FLI).

While Fini’s FLI bloc is unlikely to vote against Bondi, it could use the occasion to send another signal of its strength to the embattled prime minister, possibly by abstaining.


On Tuesday night, the government was defeated three times in the lower house when Fini’s FLI voted with the opposition against the government on a law on foreign relations.

Italy faces possible early elections as a direct result of the conflict between Berlusconi and Fini.

Even Berlusconi’s usually reserved right-hand man, Gianni Letta, said on Wednesday that the government’s term, which is scheduled to run until 2013, was now likely to last months rather than years.

Fini, who has kept his powerful post as lower house speaker, last Sunday demanded the prime minister step down for the good of the country and allow the formation of a new centre-right coalition, possibly without Berlusconi at the helm.

Weakened by a series of sex scandals, Berlusconi made it known that he had no intention of giving in to Fini’s demands.

Fini said that if Berlusconi did not resign, one minister, one deputy minister and two undersecretaries loyal to Fini would resign, forcing Berlusconi to either reshuffle his cabinet or risk asking for a confidence vote in parliament.

Commentators expect a full-blown government crisis in the next few weeks at the latest, possibily preventing approval of the 2011 budget which must by passed by year-end.

If Berlusconi is forced to resign before the budget is passed, Italy’s president may mandate an interim government with a limited programme to pass the budget, change the electoral law and lead Italy to early elections, most likely in the spring.

Italy has weathered the financial crisis better than many of its European peers but it has one of the world’s largest debt piles and 30 billion euros of bonds to roll over in December alone.

Analysts say a prolonged political crisis could weigh on investors’ sentiment.

On Wednesday, the premium investors demand to hold 10-year Italian bonds rather than euro zone benchmark German bunds rose to 173 basis points, the highest since June and in line with widening Irish and Portuguese yield spreads, due to concerns over the state of peripheral euro zone economies.