Italian leftist Enrico Letta was expected to reveal Saturday whether he has succeeded in uniting the country's feuding parties and persuading the old guard to step aside for a government of fresh talent. The moderate Letta, who has led two days of consultations with the parties in a bid to form a coalition, was said by sources close to his staff to be on the point of persuading the bickering left and right to work together.

By Paolo Biondi ROME (Reuters) - Italian prime minister-designate Enrico Letta could announce a new government on Saturday and spell out its programme early next week, political sources said on Friday, while outgoing premier Mario Monti said he did not expect to be a minister. Letta, deputy leader of the centre-left Democratic Party, has been in discussions to iron out remaining differences with Silvio Berlusconi's People of Freedom (PDL) party following an initial round of talks on Thursday.

ROME (Reuters) - Italy's centre-right on Thursday said it would support a new government by Enrico Letta but only if the prime minister designate agreed to economic priorities, including the abolition of a much-hated tax on primary residences. Speaking after meeting with Letta, Angelino Alfano, secretary of the People of Freedom party (PDL), said his delegation was satisfied with the talks but more would be needed to discuss outstanding issues. (Reporting By Philip Pullella)

By Philip Pullella and James Mackenzie ROME (Reuters) - Italy's prime minister-designate Enrico Letta started "encouraging" talks on Thursday for a new government to end two months of political deadlock, but said significant differences with the centre-right would take more time to iron out. Letta, the 46-year-old deputy head of the centre-left Democratic Party (PD), said he would use Friday as a "day to reflect" on his chances of piecing together a broad coalition to govern the euro zone's third-largest economy.