Mr Scognamiglio won 154 votes in the second round of Senate voting, one more than in a first run yesterday morning. To get elected, he needed votes of at least 164 of the Senate's 326 members.
He was narrowly beaten on both votes by the outgoing speaker, Giovanni Spadolini, backed by the defeated left-wing and centre opposition. Voting was adjourned until a third round today.
President Oscar Luigi Scalfaro cannot choose a prime minister until the Senate and Chamber of Deputies (lower house) have elected speakers. Mr Berlusconi, who has swept into politics this year and is widely tipped to become prime minister, warned that the election of Mr Spadolini might mean a swift return to the ballot box.
'A government cannot govern if its policies are not accepted in both chambers,' Mr Berlusconi said before the vote. 'Were that to happen, there would be no other solution than to go back to the electorate with a majority that would be confirmed and strengthened by the experience.'
Mr Berlusconi and his Freedom Alliance allies won an absolute majority in the 630-seat lower house last month in general elections that buried a political old guard disgraced by corruption scandals. But it won only 155 seats in the Senate, falling just short of an outright majority.
The film director Franco Zeffir elli, elected to the Senate for Mr Berlusconi's Forza Italia party, said the tycoon's threat referred to new elections for the upper house only. That would be one way of breaking a political impasse.
Mr Berlusconi's neo-Fascist ally in the Freedom Alliance played down the vote's significance. 'It won't be traumatic if Spadolini gets in,' said Gianfranco Fini, the National Alliance leader.
The turnover in the new parliament - more than 70 per cent of the new members were novices - added to the sense of history on the first day of Italy's 12th legislature. Mr Berlusconi, who came into politics less than three months ago, was among 452 newcomers in the lower house, although he was clearly frustrated by the slow procedure.
'Will I always be forced to live this kind of life?' he asked reporters. 'I've never done so little in my life.' Mr Berlusconi, owner of a pounds 5bn-a-year business empire, is expected to be named prime minister-designate to try to form Italy's 53rd government since the war.
A second ballot yesterday in the Chamber was also deadlocked and neither the Freedom Alliance candidate, Irene Pivetti, nor the left-wing 'Progressives' contender, Anna Finocchiaro, won the required two-thirds majority of 420 votes to become speaker.
Ms Pivetti, 31, who is a staunch Catholic from the federalist Northern League, will be the youngest leader of the lower house since the Second World War if, as looks likely, she wins a later round.
Mr Spadolini, 68, was a member of the Republican Party which was among political groups discredited by the corruption scandals that killed off the old parliament.
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