By Phil Stewart
ROME (Reuters) - Italians voted on Monday in the final dayof a two-day parliamentary election that could restoreconservative billionaire Silvio Berlusconi as prime minister ofa country on the brink of recession.
The 71-year-old media magnate should know within hours ofpolls closing at 3 p.m. (2 p.m. British time) whether he hasseen off a challenge by 52-year-old centre-left leader WalterVeltroni and won a third term. Voting resumed on Monday at 7a.m.
Both have pledged to reduce Italy's huge public debt, cuttaxes and liberalise the highly regulated services sector.
Berlusconi, one of Italy's richest men and a fervent U.S.ally, led Veltroni in opinion polls before the first day ofvoting on Sunday but up to one in three of the about 47 millionvoters were expected to make their choice at the last minute.
Election laws make it hard for anyone to win a clearmajority and many Italians doubt Italy's 62nd government sinceWorld War Two will revive the economy, stem big price rises onbasic foods such as pasta and bread and lift national morale.
"Right now, Italy is like a flat tyre," 79-year-old RenatoRiccini said after voting in Rome on Sunday.
"The money is never enough, prices and taxes keep going upand it's a real battle to make ends meet. Even Alitalia isgoing belly up," he said, referring to the near-bankruptnational airline which has been up for sale for more than ayear.
The last coalition government, led by the centre-left'sRomano Prodi, barely survived 20 months before collapsing inJanuary after a revolt by Catholic allies.
Some 62.5 percent of Italy voted on the first day of theelection, Italy's Interior Ministry said. That was down from66.5 percent after the first day of the last election in 2006.
Pollsters were not surprised. They had been expecting aslightly lower turnout and a higher number of invalid ballotsdue to a growing sense of disenchantment with politics inItaly.
"The election campaign has been less polarizing than beforeand there are more parties: ingredients that lead to a loss ofvotes," Fabrizio Masia of the Nexus group told La Repubblicanewspaper. "And there's a very strong 'anti-politics' element."
SAVE US SILVIO?
Both candidates voted on Sunday. Berlusconi, a charismaticself-made billionaire, was applauded as he swept past voters,cast his ballot and kissed a three-year-old boy.
"Save us, Silvio," one voter shouted.
Veltroni, a former mayor of Rome, was characteristicallylow key when voting. He told reporters: "I hope it goes well."
Berlusconi, who was prime minister from 1994 to 1995 andfrom 2001 to 2006, stumbled at times in the campaign -- sayingthe left had "no taste in women" and insulting popular soccerplayer Francesco Totti for backing his centre-left rivals.
The winner's ability to head off a recession could behampered by a complex election law, introduced by Berlusconiduring his last government, which makes it hard to win a clearmajority in the upper house.
This could complicate efforts to push through reforms tolift the European Union's fourth largest economy, which theInternational Monetary Fund says will grow at just 0.3 percentthis year.
Italy also has the world's third highest debt pile inabsolute terms. A close race could force the winner into acoalition with smaller parties. Veltroni and Berlusconi denythey would form a coalition together.
(Additional reporting by Marie Louise Gumuchian in Milanand Deepa Babington in Rome; Editing by Timothy Heritage andRichard Balmforth)
