Italy PM Renzi turns on party rebels, says they want to regain power

By Agnieszka Flak

MILAN (Reuters) - Italian Prime Minister Matteo Renzi accused rebels within his center-left party on Sunday of using a forthcoming referendum on constitutional reform to try to oust him from office and seize back power for themselves.

In a fierce assault on party dissidents, including former prime minister Massimo D'Alema, Renzi said they were looking to hold back Italy for their own personal gain and warned of a political quagmire if he loses the Dec. 4 ballot.

"December 4 is their last chance to get back into the game. That is what this is all about," he said in his home city of Florence at the end of an annual gathering of supporters that laid bare the deep divisions within his Democratic Party (PD).

Renzi has said he will resign if he is defeated, and in his first indication of what might then happen, the prime minister suggested a government of unelected technocrats could take charge, as was the case during the 2011 financial crisis.

"2017 could be a difficult but also a wonderful year," Renzi said, adding that the last thing Italy needed was a "little technocratic government" supported by the old guard.

All but one of the 33 opinion polls published in recent weeks have shown Renzi losing the referendum, with major opposition parties and PD dissidents joining forces to denounce his proposed constitutional overhaul.

Renzi said he was confident the polls were wrong and defended his reform, arguing it would bring political stability to Italy by curbing the powers of the upper house Senate and streamlining the lawmaking process.

Opponents say the changes will complicate the legislative process and reduce vital checks and balances.

ELECTORAL LAW

Renzi said his PD critics were not interested in the merits of the new constitution, and were just out to get him.

"Massimo D'Alema says he would have done a better reform. Well why didn't you do it?" Renzi said, with his audience loudly booing the name of the former PD leader, who was prime minister from 1998 to 2000 and deputy premier from 2006-2008.

One of the major worries of mainstream parties on both the left and right is that the reform could inadvertently help the anti-establishment 5-Star Movement thanks to a new electoral law which introduces a two-round voting system and offers the winner a handsome majority in the lower house of parliament.

An opinion poll published on Sunday by Corriere della Sera newspaper suggested the 5-Star would crush both the left and the right in any such second-round run-off vote.

Without a strong Senate in place, critics fear this will hand 5-Star, which has suggested holding a referendum on Italy's membership of the euro currency, unbridled power.

Renzi has repeatedly defended the electoral law, convinced the opinion polls are overstating 5-Star's strength, but in a concession to PD doubters he agreed this weekend to possible modifications, including returning to a one-round voting system.

The proposal failed to placate the likes of D'Alema, who is set to campaign in favor of a 'No' vote in the coming week.

"We are at a fork in the road," Renzi said. "The referendum pitches the past against the future, cynicism against hope, hope and ideals against nostalgia and yesterday."

(Editing by Crispian Balmer and Ros Russell)

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