Italy's Berlusconi to step down

Italian Prime Minister has drawn up a secret pact under which he will resign in December or January, paving the way for a new government in March

Controversial Italian Prime Minister Silvio Berlusconi has agreed to step down after negotiating a deal with coalition allies, it was reported yesterday just hours ahead of a crucial European Union meeting.

Berlusconi (75) is said to have made the agreement with Northern League leader Umberto Bossi, after he agreed to a deal on pension reforms as part of a package to reassure Europe Italy was doing its best to handle the financial crisis.

Italian PM has reportedly told Northern League leader Umberto Bossi that he is ready to hand over power in January

Steeped in several scandals, many have questioned whether Berlusconi is able to steer the third largest economy in the Eurozone to safety and avoid a Greek-style bailout to save it plunging into the abyss.

According to daily La Repubblica, Berlusconi is said to have told Bossi, "Let's avoid an embarrassment in Brussels and I promise you there will be elections in March."

La Repubblica also added that Berlusconi had even agreed to step down by January at the latest, in return for Bossi accepting to agreeing for the pension age to be raised to 67-years-old.

However, the reports of his intended resignation were denied by his spokesman Paolo Bonaiuti and also by Northern League spokeswoman Nicoletta Maggi who said, "There is no truth in the reports at all."

Another source close to Berlusconi also dismissed the reports and said, "This is all part of the theatre of politics and there is nothing in it at all it is all fantasy."

Berlusconi is currently facing four trials, including one for having sex with an underage prostitute which resumes next month, as does another for corruption. The other trials are for financial irregularties and abuse of office.

In recent months, he has been at the centre of controversy after it emerged that escorts were among women invited to parties he hosted at his official residence in Rome. There were also allegedly wild scenes at his infamous bunga bunga night.

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