Italy's Berlusconi dumps allies, aims for '08 vote

ROME, Nov 19 (Reuters) Italy's opposition leader Silvio Berlusconi has dumped his right-wing allies in a bid to form a new centrist force that he hopes can carry him back to power at an early election he wants to contest next year.

In an interview in Monday's La Stampa, Berlusconi explained his surprise decision to dissolve his ''House of Freedoms'' alliance with Catholics, northern separatists and post-fascists and found a new party he hopes can dominate Italian politics.

''They've driven me crazy,'' Berlusconi said of the allies with which he ruled Italy for five years up to last year's narrow election defeat to centre-left leader Romano Prodi.

''I've always been respectful, patient with everybody and yet ...

from now on the outlook has completely changed.'' Berlusconi stunned his allies by announcing the move yesterdday at the end of a nationwide referendum campaign over the weekend where he says some 8 million Italians signed his call for Prodi to stand down and face fresh elections.

Fourteen years after creating Forza Italia (Go Italy!), which quickly became Italy's biggest centre-right force, Berlusconi said he would brand his new vehicle the ''Freedom'' or ''People of Freedom'' party at a party assembly on December 2.

''The novelty is that the new party will be at the centre of the political stage,'' he said, leaving open the possibility of forming a German-style 'grand coalition' with the main centre-left Democratic Party (PD).

That would require a change to the election system which, under a law passed under Berlusconi, pushes parties to club together in pre-defined coalitions to contest elections -- aimed at creating something like an alternating two-party system.

Berlusconi said experiment had failed and the blocs on both left and right were made up of squabbling rivals. He said he would negotiate with Prodi on drafting a new election law, aiming for something like Germany's proportional representation.

Although Prodi's term runs until 2011, Berlusconi said many on the left would want to hold an early vote next year. ''I don't believe they want to keep on sharing Prodi's agony,'' he said in a reference to the constant government in-fighting.

While characterising his announcement as a bold new initiative, Berlusconi's critics said it was really an admission that the media tycoon had failed to exploit Prodi's feeble Senate majority and bring down the government in parliament.

''Berlusconi's move is the recognition of defeat, he didn't manage to fell the government,'' said Walter Veltroni, the head of the PD and Prodi's annointed successor as centre-left leader.

Gianfranco Fini, the head of the second biggest centre-right party, National Alliance (AN), who is the most popular figure on the centre right, scorned Berlusconi's move which marginalises his post-fascists.

''I don't understand if this is a new party or a rebranding of Forza Italia,'' Fini told Canale 5 TV, vowing his party would not join Berlusconi's new movement. ''AN will never dissolve, never merge, we're not even thinking about it.'' Reuters SYU RS1858