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Last Updated: Thursday, 21 April, 2005, 19:49 GMT 20:49 UK
Crisis talks under way in Italy
President Carlo Azeglio Ciampi
President Ciampi is expected to ask Mr Berlusconi to stay in office
Italy's president has been holding talks with political parties on a new government, a day after the resignation of Prime Minister Silvio Berlusconi.

President Carlo Azeglio Ciampi can call early elections but he is expected to allow Mr Berlusconi to stay in office.

Mr Berlusconi has said he aims to build a new administration with the parties that formed his centre-right coalition.

His government collapsed after suffering a crushing defeat in local elections earlier this month.

4 April: PM's coalition loses 11 out of 13 regional elections to centre-left opposition
14 April: National Alliance calls for vote of confidence
15 April: Union Of Christian Democrats pulls out of governing coalition
18 April: Opposition wins another regional poll
20 April: PM resigns, but will stay on as caretaker while he forms new coalition

Mr Berlusconi said he expected to have a new cabinet list ready as early as Friday after meeting the leaders of his three coalition partners.

But he added that not all problems with his rebellious allies had been resolved.

No Italian government has managed to stay in office for an entire five-year term since World War II.

However, Mr Berlusconi - who was elected in 2001 - holds the record for leading the longest-serving post-war cabinet.

The reaction from the Italian public has been muted, as people are used to seeing their prime ministers technically resign as a trick to reform shaky coalitions, the BBC's Tamsin Smith in Rome says.

Berlusconi confident

During a day of tense negotiations, Italy's sparring political leaders filed one by one into the president's office, our correspondent says.

Prime Minister Silvio Berlusconi
Many Italians opposed Silvio Berlusconi's support for the Iraq war

It is now up to President Ciampi to make a decision after he finishes consulting party leaders at 1000 GMT on Friday.

Mr Berlusconi on Wednesday told the upper house of parliament that his Forza Italia party had a mandate to lead until 2006 and it would do so.

"We have written important pages in our country's history," Mr Berlusconi said, addressing the government benches.

"With your confidence and your support, I am sure we will write many more," he said.

Decline in popularity

Mr Berlusconi's government was plunged into crisis last week when one of the influential partners in the four-party coalition, the Union of Christian Democrats (UDC), withdrew its four ministers.

His main coalition partner, the National Alliance, also threatened to quit.

It believes current policies are skewed in favour of the country's more prosperous north, represented in the coalition by the Northern League.

Analysts say assembling a new team may prove difficult, as Mr Berlusconi risks alienating the Northern League if he gives more posts to the National Alliance.

They say that while the Northern League wants the wealth produced in the north to be spent locally, the National Alliance and also the UDC want heavy investments in the south to kick-start economic development there.

Popular opposition to Italy's role in the war in Iraq and a struggling economy have contributed to a decline in the prime minister's popularity.

April's regional elections have seen the opposition win 12 out of the 14 regions contested.

Berlusconi loses coalition ally
15 Apr 05 |  Europe
Q&A: Italy regional elections
01 Apr 05 |  Europe

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