By Naomi O'Leary
ROME (Reuters) - Florence mayor Matteo Renzi launched a clear challenge to Italian center-left leader Pier Luigi Bersani on Thursday, saying he must either agree a coalition with former premier Silvio Berlusconi or demand a new election.
Bersani won a majority in the lower house but not the Senate in February's elections, leaving the center-left unable to govern alone. Last week he failed to forge a viable majority in parliament when his overtures to the anti-establishment 5-Star Movement were rebuffed.
Renzi, 38, who lost to Bersani last December in a vote to be the center-left's leading candidate, gave interviews to several Italian newspapers saying he was ready to stand in a new primary.
Renzi had previously hesitated to challenge Bersani, a former communist politician who blew a 10-point opinion poll lead to leave Italy in political deadlock.
But in recent days he has become increasingly critical of Bersani's line that a "grand coalition" with scandal-plagued center-right leader Berlusconi is unthinkable.
Another option could be a technocrat government sponsored by President Giorgio Napolitano, but this is opposed by both center-left and center-right.
"We cannot stop here, waiting for Bersani to get support," Renzi told the daily La Repubblica. "It's ridiculous to stick with a frozen task. We must do something: a government formed by the president, a grand coalition, or we must return to vote."
Bersani shrugged off requests for comment.
ELECTION LAW PROBLEMATIC
The Florence mayor, who had been widely expected to make his move after Bersani failed to secure a working majority, rejected suggestions that party primaries could not be organised by June.
Berlusconi's center-right People of Freedom party (PDL) has repeatedly called for Bersani to join them in a coalition or go back to the ballot box in June, although analysts say the chance is diminishing that an election can be held by then.
A new election held under the current law would run a high risk of producing another deadlock, but there is thought to be no prospect of changing it before June.
The law gives a big bonus in the lower chamber to the winning party, meaning that the center-left can control the chamber despite its wafer-thin winning margin. But the law also requires a new government to win a confidence vote in the Senate, where seats are allocated regionally.
A new vote would very likely produce another winner in the lower house who lacks a majority in the Senate.
Bersani says a snap election would be a disaster when Italy needs a solid government to tackle a deep recession. Meanwhile support for Berlusconi has been growing steadily in recent surveys, which show the center-right overtaking the center left.
Renzi, whose market-friendly views are seen as appealing to center-right voters, said he could pose the most credible challenge to Berlusconi, who is awaiting verdicts in two trials, one on charges that he paid for sex with a minor.
"WE CAN CHALLENGE BERLUSCONI"
"Berlusconi wants a vote in June precisely in order not to give me space. We can challenge him. If I run, he will be in trouble," Renzi told La Repubblica.
There was no immediate official reaction from the leadership of Bersani's Democratic Party (PD), which fears any alliance with Berlusconi would split the center-left.
But leadership member Davide Zoggia said Renzi was free to join Berlusconi if he wished.
"The choice between a coalition with the PDL or an immediate vote is the same proposal pursued obsessively by Berlusconi from the first day. If Renzi wants to govern with Berlusconi, he can go ahead," Zoggia said in a statement.
Renzi is opposed by the left wing of Bersani's group, including powerful trade unions. But the Florence mayor, a more dynamic campaigner than Bersani, is seen as a potential game-changer who could win back votes from the 5-star Movement of former comic Beppe Grillo, as well as the center-right.
His primary campaign last year promised to get rid of the political old guard, a battle cry that chimes with the demands of many supporters of the 5-Star Movement.
He has already dismissed as a waste of time Napolitano's decision to appoint two committees of "wise men" to draw up a plan of reforms that could win the support of all parties. It is due to report at the end of next week. [ID:nL5N0CP1EQ]
Little progress in ending the crisis is expected until a vote starting on April 18 to elect a successor to Napolitano, whose mandate runs out in May. He is not allowed to call a parliamentary election in the final months of his presidency.
(Editing by Barry Moody and Kevin Liffey)