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Italy searches for a prime minister

ROME (Reuter) - The Italian President, Oscar Luigi Scalfaro, held final consultations yesterday aimed at finding a new prime minister but the issue was complicated by the resurgence of old party rivalries. He said later that defending the lira was a priority for the new administration.

Mr Scalfaro met heads of Italy's three most important parties yesterday morning with the identity of the successor to the Socialist prime minister, Giuliano Amato, who resigned on Thursday, still far from clear.

Some political commentators suggested that Mr Amato, whose 10-month government was sunk by a series of corruption scandals, could be called on to form a second administration.

The President was expected to make an announcement today but renewed friction between the ruling Socialist and Christian Democrat alliance and the Democratic Party of the Left (PDS), the former Communist party, risked upsetting his plans.

The Socialist leader, Giorgio Benvenuto, said after meeting Mr Scalfaro that the President must decide, but added that Mr Amato had 'proved to be an efficient statesman'. Mr Benvenuto had previously opposed a return of Mr Amato. He called for an enlargement of the outgoing four-party coalition, favouring a new government open 'not only to the PDS, but to other forces'.

But the PDS leader, Achille Occhetto, made it clear that he continued to oppose the return of Mr Amato and urged a break with the past. 'The next government must not come from the old party alliances,' he said after meeting Mr Scalfaro.

The Italian Communist Party, the forerunner of the PDS, was excluded from government throughout the Cold War.