Italy Vote: Partial Results Point To Deadlock

Italy's election appears headed toward deadlock, with the centre-left leading in the lower house of parliament and Silvio Berlusconi's conservatives ahead in the Senate.

Exit polls after two days of voting had showed Pier Luigi Bersani's centre-left coalition leading in both houses, but projections based on early vote count suggest a stunning comeback in the Senate by Mr Berlusconi.

A protest movement led by comedian-turned-politician Beppe Grillo had a strong result in both houses, confirming its surprise role as a major force in Italian politics, the early results show.

A centrist-coalition led by outgoing Prime Minister Mario Monti was headed for a poor showing, as Italians voted against the austerity measures passed by his administration of unelected technocrats.

Officials warned that such deadlock could make Italy ungovernable and force new elections, and markets were quick to react to the risk of looming instability in the eurozone's third-largest economy.

After rising in the wake of initial exit polls, gains quickly evaporated on Milan's main stock index.

The prospect of a political impasse also caused jitters in markets overseas.

"It's a shock vote that leaves us with a hung parliament. Likely, it won't be possible to form any governing majority," said Ferruccio de Bortoli, the editor-in-chief of Italy's largest newspaper, Corriere della Serra.

The voting was held amid a deep economic crisis and high unemployment rates in Italy, and a government paralysis could re-ignite the eurozone crisis.

Under the Italian system, a party or coalition must have a majority in both houses of parliament in order to be able to govern.

Italy's electoral laws guarantee a strong majority in the lower house to the party or coalition that wins the biggest share of the national vote.

But the Senate is elected on a region-by-region basis, making the result unpredictable.

Big regions including Lombardy in the rich industrial north and the southern island of Sicily will likely be crucial, and partial returns suggested Mr Berlusconi was ahead in both.

According to the returns, the centre-left held a small lead in the lower house, though the gap appeared to be thinning.

And in the Senate, thanks to the vote distribution and regional bonuses, Mr Berlusconi seemed to have a slight majority in the number of seats.

The austerity measures brought in by Mr Monti have caused widespread public resentment, and corruption scandals during a bitter electoral campaign have fuelled citizens' anger at their rulers and played into Mr Grillo's hands.

His Five-Star Movement called for a renewal of the political class, though critics say Mr Grillo is a populist with no recipe for the country's economic woes.

Franco Frattini, a former ally of Mr Berlusconi and ex-foreign minister, told Sky News: "One out of four Italian voters decided to vote for Grillo.

"This shows that … Italians wanted politicians to be new, to change. They want to see a new political spectrum."

Berlusconi, a 76-year-media tycoon, was considered a spent force when he resigned at the height of the economic crisis in November 2011.

But he conducted an aggressive campaign, promising the refund of an unpopular property tax that was imposed by Mr Monti, and gradually started surging in the polls.