Silvio Berlusconi 'resignation': La Repubblica claim denied

Italian Prime Minister Silvio Berlusconi during a meeting in Brussels (23 Oct)
Image caption Mr Berlusconi reached the deal after late-night talks with coalition partners

The main coalition ally in the Italian cabinet has denied a newspaper report that Silvio Berlusconi is to step down.

Silvio Berlusconi would leave at the end of December or the beginning of January, according to La Repubblica, with fresh polls to be held in 2012.

The reported deal came during talks between Mr Berlusconi and Northern League leader Umberto Bossi over economic reforms demanded by the EU.

The Northern League told the BBC it was an attempt to undermine Mr Berlusconi.

Rome's EU partners had sought action to tackle the country's public debt which stands at 1.8 trillion euros, equal to 120% of GDP.

La Repubblica reports that as part of the agreement, Mr Berlusconi will agree to step aside in exchange for the Northern League accepting an increase to the pension age. The age will now rise to 67 by 2026, the Corriere della Sera reports.

Credible reform

At a meeting over the weekend, Mr Berlusconi was publicly reproached by French President Nicolas Sarkozy and German Chancellor Angela Merkel who said that it was vital for Italy's public debt "to be reduced in a credible manner in the coming years".

Italy, the third largest economy in the eurozone, needs to issue some 600bn euros (£520bn; $835bn) in bonds over the next three years to refinance maturing debt.

Raising the retirement age was one of the key economic reforms demanded by the country's EU partners as a condition for supporting Italy's bonds.

On Tuesday, for the first time, Silvio Berlusconi raised the possibility that he might step off a political stage he has dominated for 17 years.

"I hope the conditions arise where I can leave the responsibility of the presidency to others, perhaps remaining within the party as its founding father," Mr Berlusconi is reported as saying, according to La Repubblica.

"Whatever happens I will do what my party and the coalition ask of me."

The BBC's David Willey, in Rome, says that although these are unconfirmed reports, it would not surprise anyone to learn that Mr Berlusconi has decided to throw in the towel in the hope that he might get re-elected.

The prime minister, our correspondent explains, knows that there is no real alternative political leader in the country and that a controversial electoral law he passed could help him regain power if the country goes to the polls again.