Leftists march in Rome as Prodi denies govt to fall

ROME, Oct 20 (Reuters) Hundreds of thousands of left-wing Italians marched through Rome today, adding to pressure on Romano Prodi's government, which one cabinet minister predicted would collapse in coming months.

Waving red flags and Che Guevara banners, protesters marched through the capital to tell the government -- which includes several communists -- to move further to the left on issues such as welfare reform and pensions.

The rally came a week after rightists, including a minority of black-shirted neo-Nazis, staged an anti-Prodi march.

The leftists said their rally was not aimed against Prodi, who recently clinched a compromise with unions on raising the retirement age and is resisting calls to repeal a labour law which makes it easier to hire and fire.

''It's not against the government, which we are a part of -- that would be self-harm,'' said Oliviero Diliberto, head of the Italian Communists party. ''It's to ask the government to do better.'' When asked whether Prodi had anything to fear from the far left -- which brought down his first administration in 1998 -- Diliberto said Prodi should worry more about the other wing of the coalition which could in theory switch support to the centre-right bloc of former Prime Minister Silvio Berlusconi.

Justice Minister Clemente Mastella, who heads his own small centrist party, said in today's newspaper that Prodi no longer had a parliamentary majority and predicted there would be a general election by spring, three years ahead of schedule.

Prodi played down such speculation, dismissing as fiction a newspaper article which reported him admitting to leaders of Saturday's march that his government was likely to collapse in October or November due to defections in the Senate.

''It's absolutely all invented,'' Prodi told reporters.

Prodi's slim election victory in April 2006 gave him a wafer-thin majority in the upper house where every major policy vote risks defeat. Prodi has already resigned once, in February, after leftists deserted him in a Senate vote, but returned to office after winning a vote of confidence.

Prodi has said he intends to serve his full five-year term and then retire, but many pundits say he is unlikely to hold his fragile coalition together for that long.

In any new election the centre left would be headed by Rome's mayor, Walter Veltroni, a Prodi loyalist who was elected leader of the new Democratic Party -- former by merging the two main government parties -- last week.

REUTERS AE KN2152