Prime Minister Silvio Berlusconi

But with most ballots counted in the Rome area, the opposition candidate led the centre-right incumbent with 53.5 percent support, on course to seize power without needing a second-round ballot.

"This is a very important vote," said Gavino Angius, the centre-left parliamentary leader in the Senate. "Rome is clearly the most important prize up for grabs."

The centre-left also looked set to stay in power in a series of key provinces and cities such as the northern Brescia, Pisa and Massa.

In what was seen as a referendum on the first two years of Berlusconi’s leadership, nearly 12 million Italians – a quarter of the electorate, voted in Sunday and Monday’s local elections.

But despite losing Rome, government parties appeared to be holding their ground and possibly making modest gains elsewhere in the country.

Partial results also showed Berlusconi's allies strengthening their grip on Sicily, keeping control of Palermo province and looking set to win control of the province of Syracuse from the centre-left as well as the northern city of Massa.

“In the end, I don't think we are facing any changes in the balance of power," said Fabrizio Cicchitto, one of the heads of Berlusconi's governing Forza Italia party.

Berlusconi has denied any wrong-
doing in a 1985 business deal

Local issues such as, unemployment, crime and taxes were major themes in elections covering a quarter of the country, for some 12 provincial presidencies as well as mayorships in almost 500 cities.

However, it was Berlusconi's battle against an ongoing corruption trial and his high-profile electoral campaigning that often stole the spotlight.

After only appearing at one political rally in last year's local elections, Berlusconi led an unusually boisterous campaign this time round.

Bearing pictures of Berlusconi’s, election posters in Rome read: "We must defeat this left. It is a danger for Italy, a danger for democracy and a danger for liberty."

Observers believe the vigorous campaign sought to restore the PM's image in the midst of a criminal trial in which he is accused of bribing judges in a 1985 company takeover battle. Berlusconi denies the charges and says the Milan judges are leading a politically motivated campaign against him.