End of Silvio Berlusconi era approaches

Italian Prime Minister Silvio Berlusconi and his fiercest rival Gianfranco Fini are preparing for a final showdown which analysts say is likely to lead to a government collapse in a matter of weeks.

• Berlusconi is losing his grip on power

Mr Fini, the once-loyal lower house speaker who bitterly split with Mr Berlusconi, is expected to withdraw a minister, a deputy minister and two undersecretaries from the government today.

While that will not in itself sink the government, it will be another blow for Mr Berlusconi, further escalating a political crisis that reached boiling point in the last week.

Seeking to regain the political initiative, Mr Berlusconi announced this weekend that he would call a do-or-die confidence vote in both chambers of parliament after the 2011 budget is passed - probably around mid-December.

While he still enjoys a narrow majority in the Senate, he can no longer count on one in the lower house after Mr Fini's defection.

"Berlusconi can limp along for a month or so, but the balance of power is no longer in his favour," said Maurizio Pessato, head of polling firm SWG.

"There has been a shift in public opinion, and with the economic crisis he has also lost the backing of powerful business lobbies. This time, it looks like the tide is turning against him."

A defeat in parliament would force him to resign, opening up several scenarios, including an early election next year.

Mr Berlusconi's last remaining coalition ally, the Northern League, says he could try to form another government.

But Mr Fini has rejected that option, saying Mr Berlusconi must step down to pave the way for a new centre-Right coalition.

Faced with a full-blown political crisis, President Giorgio Napolitano could appoint an interim government to run business until new elections, like the 1995 administration headed by former finance minister Lamberto Dini that followed the collapse of Mr Berlusconi's first government. The PM has said that if Mr Fini brings him down the only option is snap polls in early 2011, two years ahead of schedule. His gamble is that voters will return him to office. "Don't read the news papers. Voters still exist and 60 per cent of them are with me," Mr Berlusconi told a rally yesterday. Opinion polls don't back him up. A survey in Corriere della Sera gave a coalition between Mr Berlusconi's People of Freedom (PDL) party and the Northern League only a marginal lead over the centre-Left opposition. Mr Fini's movement stood at about 8 per cent with the centrist UDC party at 5.8 per cent, making a "Third Way" bloc potentially determinant for any new majority.

Mr Fini co-founded Mr Berlusconi's PDL in 2008. But after months of acrimonious exchanges, Mr Berlusconi expelled him in July.The break-up deprived the prime minister of a guaranteed majority in the lower house, virtually paralysing the executive.

The crisis reached new heights when it emerged that Mr Berlusconi had called Milan police in May to ask for the release of a 17-year old nightclub dancer held for theft. The girl says she attended parties at his villa.

Mr Berlusconi has denied any interference with the justice system. But the scandal emboldened his critics, who say his raucous lifestyle is distracting him from running a country only slowly emerging from its worst post-war recession and with a huge public debt mountain.

Analysts say the countdown to the end of the Berlusconi era, even among his allies, has begun.

"It is not just a majority or a government that is approaching the end. It is the journey of a lonely man that is nearing its conclusion," wrote Corriere della Sera in an editorial yesterday.