Italy speaker refuses to resign amid deepening crisis

ROME (Reuters) - The influential speaker of Italy's lower house refused to step down Friday after being censured by his own party, and said his supporters could vote against the government of his former ally Prime Minister Silvio Berlusconi.

"Obviously I have no intention of resigning," Gianfranco Fini told a packed news conference a day after Berlusconi effectively booted him out of the party they jointly founded two years ago, raising the spectre of early elections.

A combative Fini also attacked Berlusconi for "having not exactly a liberal concept of democracy" and of trying run a government with an autocratic business mentality, "which has nothing to do with our democratic institutions."

Standing behind the 58-year-old Fini were parliamentarians who will join him in his party rebellion and could weaken Berlusconi's majority in parliament.

Fini supporters said they had about 34 members in the lower house of parliament, thus enabling them to deprive him of a majority there. They have 10 supporters in the Senate, which could reduce Berlusconi's majority there to two votes.

Fini said his fellow rebels would "loyally support the government every time it acts within the framework of the electoral program, but will not hesitate to fight proposals that are unfair or damaging to the wider interest."

He did not mention the risk of early elections, which commentators said were a real possibility after Berlusconi dramatically split with Fini, once his most powerful centre-right ally.

In a tense string of events that climaxed Thursday night, Berlusconi accused Fini being a traitor and conspirator and trying to administer a "slow death" to their party.

After months of tension and even open hostility between the estranged conservatives, Berlusconi's party issued a tough document censuring Fini, saying his actions and comments no longer reflected the ideals of the party he helped found.

The coalition, made up of the People of Freedom (PDL) and the Northern League, needs a majority of 316 in the lower house. Before the split, it could count on up to 344 votes, including 14 from smaller parties who decide votes on an ad hoc basis.

But the new numbers could deprive Berlusconi of this comfortable cushion of nearly 30 votes, leaving him prey to whims of tiny parties or even demands from the Northern League, which caused the collapse of his first government in 1994.

The situation caused by the de facto implosion of the centre-right was unprecedented, with no institutional guidelines on the sequence of steps over the next few days or weeks.

Several commentators Friday said Berlusconi told his aides that if there were enough defectors and "if they make our lives difficult," he would prefer to hold early elections because he is convinced his party will do well without Fini.

BRUTAL BREAK-UP

Commentators said if the political situation becomes untenable, President Giorgio Napolitano could appoint an interim government to run business until new elections, like an administration headed by former Finance Minister Lamberto Dini in 1995 after the collapse of Berlusconi's first government.

Berlusconi has been locked for months in conflict with Fini, who was once considered his heir as leader of the centre-right.

The censure document, which was signed by all but three of the 36 members of the presidency of the PDL, rebuked Fini for positions it said were incompatible with the party line.

It accused Fini, who co-founded the PDL with Berlusconi two years go, of waging "political opposition" within his own party and of trying to administer a "slow death" to it.

At his news conference, Fini listed the charges against him like a defendant in the dock and defiantly rejected each one.

Fini, an ex neo-Fascist, dissolved his own National Alliance party to merge it with Berlusconi's Forza Italy after nearly 14 years of supporting him in three previous governments.

Opposition leader Pier Luigi Bersani said Berlusconi should admit that his government was in a deep crisis and that the prime minister should address parliament.

Fini has enraged the prime minister by hammering away at the theme of morality and legality in government, and insisting that officials implicated in judicial investigations should resign.

He has also helped force Berlusconi to water down a bill limiting the use of wiretaps by magistrates that would also have strongly restricted press reporting of wiretap transcripts, a move critics say would hamper the fight against corruption.