Italy's Bersani struggles to form government

Italian leftist leader Pier Luigi Bersani struggled to form a government Saturday as his rival Silvio Berlusconi said he was ready to return to the polls after elections that left the country in political gridlock.

Bersani began talks to try and build support despite his lack of a parliamentary majority, but Berlusconi told tens of thousands of supporters that the leftist was destined to fail and that new elections should be called.

"I do not deny this is a difficult task but I think other roads would be even more difficult and even more precarious," Bersani told reporters.

The leftist has so far ruled out a "grand coalition" with Berlusconi and is instead trying to form what would be a minority government reliant on votes from other parties in parliament.

Analysts say another option would be a technocratic government similar to the outgoing one led by Prime Minister Mario Monti, a former European commissioner.

Bersani got the official nod on Friday from President Giorgio Napolitano, who asked him to report back "as quickly as possible" on his bid to govern after the inconclusive elections on February 24 and 25.

Bersani's coalition won a majority in the lower house but no party won in the upper house -- a first in Italy's post-war history.

Berlusconi's centre-right coalition came in a very close second. The scandal-tainted former prime minister told a rally in central Rome on Saturday that he was ready for fresh elections.

"I see you're all ready for a new election campaign and this time we'll win big!" Berlusconi told the crowd, adding: "I'm ready too!"

"If Bersani continues this absurd attempt at a minority government, he should know that our opposition will be tough," he said.

"If they fail, then we should not waste the country's time and we should return to vote immediately."

Berlusconi has supported a coalition with the centre-left, calling it "a government of national concord".

Supporters were also rallying against what they said was the victimisation of the 76-year-old billionaire tycoon.

Berlusconi over the past year has been convicted of tax fraud and breaking state secrecy laws and is also on trial for having sex with an underage prostitute and abuse of office.

Italian media said Bersani could finish up his consultations on Tuesday or Wednesday and return to Napolitano on Wednesday or Thursday to say whether he has enough support for a government.

In any case, most analysts say that Italy will be forced to hold fresh elections -- within a few months at the earliest or up to two years at the latest.

European capitals and financial markets are watching nervously and have pressed for the eurozone's third largest economy to move quickly, particularly after a bailout dispute in Cyprus reignited fears over the euro area debt crisis.

A former school teacher who joined the then-powerful Italian Communist Party as a young man, the 61-year-old Bersani is the son of a car mechanic and is known for his down-to-earth style.

He is trying to woo lawmakers from the Five Star Movement, a new protest party that scored a stunning success in the elections, winning a quarter of the vote and coming in third after Bersani and Berlusconi.

The party has repeatedly turned him down.

Napolitano all but excluded the possibility of a coalition between Bersani and Berlusconi, saying the obstacles "appear significant".

The centre-left currently holds 123 senate seats.

It hopes to be able to count on the support of Monti's centrist coalition, which holds 18 seats -- but would still need another 17 to reach the senate majority of 158.

Any government requires a majority in both houses of parliament under the Italian system.

Italy managed to pull back from the debt crisis under Monti, who was brought in at the end of 2011 after Berlusconi was ousted by a parliamentary revolt amid European pressure and a wave of market panic.

But while Monti's austerity reforms and tax hikes reassured European leaders, the economy has failed to pick up and many Italians are suffering.

During his campaign, Bersani promised to stick to the broad course of reforms and budget discipline pursued by Monti but said he would do more to promote jobs, growth and "social equity".

If he does become prime minister, he would face the huge challenge of balancing pressure at home to ease austerity and European insistence for Italy to stick to its economic targets.

Bersani has also responded to the protest votes that went to the Five Star Movement, saying he intends to halve the number of lawmakers in parliament and do away with unpopular perks.