Berlusconi disputes Prodi victory

Romano Prodi insists he can lead a strong government

Italy's centre-left opposition leader Romano Prodi has been declared official winner of the parliamentary election after an extremely close race.

But his rival, centre-right PM Silvio Berlusconi, refused to admit defeat, saying there had been irregularities.

Official results showed Mr Prodi had won just enough seats to control the Senate (upper house) after having already won a lower house majority.

He rejected Mr Berlusconi's suggestion of forming a grand coalition.

The count gave Mr Prodi 158 Senate seats, against 156 for Mr Berlusconi.

The final results came after a nail-biting night of conflicting forecasts, based on exit polls and partial counts, which variously put the coalitions of Mr Prodi and his rival ahead.

Anyone with good sense should consider a government... which contains the representatives of all the Italians Silvio Berlusconi

Mr Berlusconi, who won two previous elections, suggested forming a grand coalition spanning both camps, like that in Germany.

"Anyone with good sense should consider a government... which contains the representatives of all the Italians," he told reporters.

A spokesman for Mr Prodi said the centre-left planned to govern with the coalition it had put to the voters and rejected the idea of a grand coalition "absolutely".

'Murky'

Mr Berlusconi, a billionaire media magnate, also said it was too early for anyone to claim outright victory.

He insisted the voting figures showed "many, many, many murky aspects" and needed to be checked - especially the votes cast by expatriate Italians, which determined the balance in the Senate.

We want peace, we want unity, we want economic recovery and harmony Romano Prodi In pictures: Italian elections Italian press in grim mood

The leader of the observation team from the Organisation for Security and Cooperation in Europe, Peter Eicher, said there appeared to be irregularities including "a very large number of blank, invalid or contested ballots".

He did not accuse either side, but said he also had misgivings about the late adoption of new electoral laws and unbalanced coverage by parts of the Italian media.

The coalition led by Mr Prodi - a former prime minister and former president of the European Commission - is thought to have won the vote in the lower house by just 25,000 votes.

But changes to the electoral system meant whoever won the lower house would automatically get a working majority there, even if the margin was small.

Fears of paralysis

Italians awoke on Tuesday to newspaper headlines declaring that the election had split the country in two.

Mr Prodi said he would have the authority to lead the country for five years despite the apparent narrow margin of victory, vowing to "wake up Italy".

HAVE YOUR SAY The coalition on the left is made up of parties that had only one thing in common: defeat Berlusconi Fulvia Mancini, Bologna, Italy Send us your comments Italian voters' reaction

"We want peace, we want unity, we want economic recovery and harmony," he told a news conference.

Despite Mr Prodi's majority in both houses of parliament, his razor-thin majority in the Senate will make it difficult to govern the country, correspondents say.

Milan's stock exchange opened 1% down on Tuesday as financial markets seem braced for a period of political paralysis.

A fragile incoming centre-left government with the narrowest of majorities and potentially deep splits between coalition partners may be unwilling or unable to tackle Italy's urgent economic problems with painful reforms, BBC business reporter Mark Gregory says.