* PM Letta eyes support from centre-right rebels inconfidence vote
* Berlusconi lashes out at "traitors"
* Letta needs handful of Senate seats for new majority
By James Mackenzie
ROME, Sept 30 (Reuters) - Silvio Berlusconi's bid to pushItaly into new elections faces a test on Monday when he meetslawmakers from his centre-right party who have shown growingunease over his shock decision to pull support from PrimeMinister Enrico Letta's coalition.
Berlusconi's decision to order the five ministers from hisPeople of Freedom (PDL) party to resign from Letta's cabinet hasplunged Italy into political chaos and left the euro zone'sthird-largest economy without a functioning government.
Financial markets, which have been increasingly nervousabout Italy after a week of rising political tensions, areexpected to sell off government bonds and stocks on Monday,adding to the atmosphere of crisis.
Letta will go before parliament to seek support to continuein a confidence vote, probably on Wednesday, leaving two days ofmanoeuvering among the parties, starting with a meeting betweenBerlusconi and PDL parliamentarians on Monday afternoon.
The billionaire media tycoon, who is fighting moves to expelhim from parliament following his conviction for tax fraud lastmonth, said at the weekend he wanted elections as soon aspossible.
But he faces resistance not just from President GiorgioNapolitano, who would have to order parliament to be dissolved,but also from his own increasingly fractious supporters, some ofwhom may switch allegiance and back Letta's government.
All five of the ministers ordered to resign on Saturdaycomplied but made statements expressing reservations or evenoutright disagreement with the decision, prompting Letta to hopethat he may be able to win over centre-right dissenters.
Speaking on RAI state television late on Sunday, he said thePDL ministers appeared to be at odds with Berlusconi and theparliamentary party, split between hardline "hawks" and moremoderate "doves" also seemed uncertain.
"I hope that there is a part of the PDL which is not inaccord with Berlusconi," he said.
Letta enjoys a commanding majority in the lower house butwould need to win over a couple of dozen senators from the PDLor opposition parties including the anti-establishment 5-StarMovement to be able to be sure of parliamentary support.
Letta's unwieldy coalition government of traditional rivalsfrom the left and right has struggled ever since it was formedafter last February's deadlocked elections which left no partywith the numbers in parliament to govern alone.
But with opinion polls roughly balanced between Letta'scentre-left Democratic Party and the PDL there is no enthusiasmfor a return to the polls under the current voting system, whichmost analysts believe would simply produce more stalemate.
Berlusconi's conviction for tax fraud and subsequent movesto strip him of his seat in the Senate have exacerbated thetensions, which came to a head last week when PDLparliamentarians threatened to resign over his legal battle.
A special Senate committee meeting on Oct. 4 is expected tovote to open proceedings that could lead to Berlusconi beingthrown out of parliament by mid-October.
The former premier, who celebrated his 77th birthday onSunday, brushed off talk of breakaways from the PDL and told aprogramme on his own Italia Uno channel that he did not believethat a government backed by "traitors" could survive.
"We'll decide our line tomorrow and I don't believe anyoneor anything will divide us," he said.
With Italy falling behind in its efforts to bring the budgetdeficit under European Union limits and youth unemploymentrunning at nearly 40 percent, the prolonged wrangling betweenthe parties has blocked efforts to reform the economy, after twoyears of recession.
On Friday, cabinet unity collapsed after ministers failed toagree on a vital package of budget measures to cut the deficitbelow the EU limit of 3 percent of gross domestic product andfund measures to halt an increase in sales tax to 22 percentfrom 21 percent.
Berlusconi seized on the sales tax issue to pull out of thegovernment, saying Letta had reneged on a deal to prevent theincrease from coming into effect, a charge the prime ministerdescribed on Saturday as a "huge lie".
- Politics & Government
- Enrico Letta