Italy votes in referendum opposed by Prodi

ROME, June 25 (Reuters) Italians began voting today in a two-day referendum that could herald the biggest constitutional shake-up in half a century if Prime Minister Romano Prodi fails to persuade the country to reject it.

Prodi, whose office of prime minister would be strengthened by the reforms, says the package will wreck national unity, weaken the president and cost the nation more than 315 billion dollars to plement.

Former Prime Minister Silvio Berlusconi, whose entre-right coalition championed the reforms before being ousted from power in April elections, says they will regenerate Italy's antiquated system of government.

Italy's constitution was drawn up after World War Two with the aim of preventing the return of a dictator like Benito Mussolini.

But critics say it contains so many checks and balances that it has been hard to govern, with many post-war administrations surviving barely a year.

The referendum gives Berlusconi a sorely needed chance to reassert himself as leader of the centre-right ''House of Freedoms'' coalition after he lost the national elections and then failed to win key seats in local polls last month.

''The House of Freedoms wants a respite from repeated defeat with a document that destroys the constitution,'' Prodi said in the run-up to the vote, urging Italians to vote ''no.'' ''It's an insult to our country and a distortion of the rules that govern Italy.'' The polls opened on Sunday at 0600 GMT and close at 1300 GMT on Monday, when first projections will be released. As of 1700 GMT tday, 21.6 per cent of Italian voters had cast ballots, the Interior Ministry said.

Both sides have predicted victory but commentators say uncertainty over the turnout makes it impossible to predict.

The referendum would give Italy's 20 regions full autonomy over health, schooling and policing, a move critics say would mean better services for richer northern regions, to the detriment of the poorer south.

This was a priority for the small, autonomy-minded Northern League party, a raucous member of Berlusconi's coalition which had repeatedly threatened to quit without the reform.

It will also transform the upper house Senate into a federal, rather than national legislative body and give the prime minister more clout, enabling him or her to hire and fire ministers and dissolve parliament.

This should effectively halt the common Italian practice by which parties switch sides in mid-term and bring down a prime minister.

The referendum is needed because the measure passed by only a simple majority in parliament last November, when Berlusconi was still prime minister, instead of the two-thirds majority that would have made the changes automatic.

Former President Carlo Azeglio Ciampi, urged Italians to reject the changes, saying the constitution as it stands is ''beautiful, vital and more relevant than ever.'' Prodi's ruling centre-left says the changes would give too much power to the prime minister and weaken the role of the president, who has traditionally been an impartial arbiter.

REUTERS KD BST009