"There is nothing to worry about, we are serene," the centre-left leader, who won a razor-thin majority in the elections, was quoted as saying.

Meanwhile Berlusconi, the incument prime minister, who initially demanded a recount of 43,000 contested votes after Prodi won, has called for a wider check of returns from all 60,000 polling stations, as well as more than one million votes deemed invalid.

"The result must, and will, change because there has been endless vote rigging in different places, all over Italy,"  Berlusconi said late on Wednesday after visiting Carlo Azeglio Ciampi, the Italian president.

"Did you think you'd got rid of me?" he asked reporters.

Responding to the call, Prodi accused the prime minister of delaying tactics and told supporters at a victory rally in his home city of Bologna that the media magnate politician should "go home".

Recount call

It was unclear exactly what transpired at the 70-minute meeting between Berlusconi and the president, but Italian newspapers, citing government sources, said the prime minister had hoped to obtain a special decree signed by Ciampi ordering an unprecedented recount of the 1,100,000 spoiled votes.

The president is believed to have refused.

Berlusconi has refused to
concede defeat

Berlusconi has kept up a barrage of electoral fraud allegations  and refused to concede defeat for his centre-right government since the results on Tuesday showed Prodi as the narrow winner.

Economists said the stalemate would do little to help Prodi's pledge to revive Italy's ailing economy.

"It's not a good start for the new government," said Matthew Sharratt, a Bank of America economist.

Sharratt warned against Italy probably facing a two months of "administrative paralysis" before a new government could be sworn in.

Growth fears

Raj Badiani, economist with Global Insight, said the standoff would have "no immediate impact" on the economy, but could affect recent positive consumer and business confidence figures, if allowed to drag on.

"The result must, and will, change because there has been  endless vote rigging in different places, all over Italy," 

Silvio Berlusconi
Italian Prime Minister

"Obviously if the situation drags on, we could then see another year in which growth is close to zero," he said.

Berlusconi has the backing of two of his House of Freedoms allies, the National Alliance and Northern League, although the third - the Christian Democrat UDC - has been silent over the prime minister's allegations.

"We can't go on like this for the next two months," the Corriere della Sera quoted Christian Democrat UDC leader, outgoing parliament speaker Pier Ferdinando Casini, as saying.

For his part Prodi has pressed ahead with talks with his coalition partners on forming a government, and sought to give an impression of a smooth transition to power.

'We need patience'

After Berlusconi's allegations, he made a late-night phone call to Giuseppe Pisanu, the interior minister, whose ministry was responsible for overseeing the vote.

Prodi said that Pisanu had told him: "Relax, and have a good Easter."

He added: "The situation seems calmer, because I know there's nothing to worry about. We need patience, but in the end, this is democracy."

Prodi said he had received congratulations from foreign leaders, including Jacques Chirac, the French president, but none yet from George Bush, the US president, who is an ally of Berlusconi.

Prodi's admission on Wednesday that Italy will have to wait until May for a new government, has, however, done little to quell the growing sense of a political crisis.

President's term

The situation is complicated by the fact that Italy's president, whose duty is to swear in the new government, ends his seven-year term of office on May 18.

Ciampi, 85, has said he wanted his successor to do the swearing-in.

The first task of the new parliament, which is due to convene on April 28, will be to elect the new president.

The Italian press feared drawn-out negotiations because of the parliamentary divisions left by the recent vote.

Prodi's center-left coalition squeaked into power by a margin of 25,000 votes in the lower house Chamber of Deputies, where a bonus system under Italy's electoral law automatically gives his Union coalition 55% of the seats regardless of the margin of victory.

The Union also has a two-seat majority in the upper house Senate.

The results are considered provisional until Italy's supreme court, the Corte di Cassazione, rules on their validity.

Italian media said a ruling was not expected before Sunday or Monday.