Crisis talks resume

Prime Minister Silvio Berlusconi's fractious coalition launched into a second day of talks yesterday aimed at saving the government from collapse.

Mr Berlusconi's supporters said they were confident that his administration would pull through the biggest crisis of its three-year life, despite an icy stand-off between the prime minister and his unyielding centrist allies.

A first, four-hour session of negotiations broke up shortly after midnight without agreement following a reportedly harsh exchange of words between Mr Berlusconi and the leader of the centrist UDC party, Marco Follini.

"This is all your fault," participants quoted Mr Berlusconi as telling Follini at Sunday's meeting, blaming the UDC for pushing the government to the edge of collapse in a row over economic policy, distribution of power and constitutional reform.

Senior alliance officials resumed talks yesterday.

"The constructive elements outnumber the negative ones. One can be hopeful about a positive conclusion," Industry Minister Antonio Marzano told reporters yesterday.

A leading UDC politician also voiced cautious optimism that the many problems plaguing the centre-right coalition would be overcome. "We could wrap this up tonight," said Luca Volonte, the parliamentary party leader of the UDC.

However, Mr Follini remained silent and was as determined as ever to wrest concessions from Mr Berlusconi, his entourage said.

Mr Follini sent Mr Berlusconi a letter at the weekend spelling out his terms for keeping the UDC in the government.

His demands have targeted the most sensitive parts of the government programme, including calls to moderate Berlusconi's tax cut plans and challenging another coalition ally, the Northern League, which wants to hand more power to the regions.

He is also seeking guarantees that state broadcaster RAI should be independent and clear of the influence of Mr Berlusconi, whose family controls Italy's biggest private media company.

Political sources said Mr Berlusconi told Mr Follini on Sunday that he would turn his television empire against the UDC if it pulled the plug on the government.

The crisis sweeping the government was unleashed by last month's European and local elections in which Mr Berlusconi's Forza Italia party lost ground to its three junior partners.

Ensuing cabinet squabbles led last week to the resignation of close Berlusconi ally, Economy Minister Giulio Tremonti, and his replacement has become part of the negotiation process.