Tight result forecast as Italy votes

With everything still to play for after a tightly contested campaign, Italian voters flocked to the polls yesterday for their third general election in four years, hoping above all for a clear result to enable the country to end its chronic political instability.

Early indications suggested that turnout among the country's 49 million eligible voters would be high, belying widespread forecasts of voter cynicism about how much this election can really change.

The results, which will probably have to be digested carefully even after they are announced early this morning, will point to one of three outcomes:

t A victory for the centre-left coalition known as the Ulivo, or Olive Tree, led by the Bolognese economist Romano Prodi and supported by the mainstream left as well as progressive Christian Democrats, environmentalists and the outgoing prime minister, Lamberto Dini. This would mark a historic turning point for the Italian left, which has been excluded from national government since the war.

t A victory for the centre-right, led by Silvio Berlusconi and his reformed neo-fascist ally Gianfranco Fini. This would restore the government led by Mr Berlusconi after the last election in March 1994, but without the support of the separatist Northern League, which has since gone its own way. Its programme this time is less moderate, less committed to the free market and more Euro-sceptic.

t No clear result. This could lead to another "technical" government similar to the one led by Mr Dini for the last 15 months, or a broad cross- party coalition committed to institutional reforms, or total breakdown followed by another general election.

Opinion polls have been banned for the last three weeks, but private surveys have pointed to a slight advantage for the Ulivo, which has the confidence of the financial markets and many of Italy's foreign partners. But the exact nature of the new government will depend on the detail of the result. Trends to watch out for include:

t The relative strength of Mr Berlusconi's Forza Italia and Mr Fini's National Alliance. The moderate wing of Mr Berlusconi's party has been steadily squeezed over the past two years as Mr Fini has grown stronger; a poor result for Mr Berlusconi could force his retirement from politics and the collapse of his party.

t The performance of the Northern League which, according to the private surveys, could be a big beneficiary if Forza Italia fades, allowing it to hold the balance of power. Both main blocs have spurned alliances with the League because it is considered unpredictable and dangerously separatist, but they might have to change their minds.

t The performance of Mr Dini, another pivotal figure. Although standing with the centre-left, he is a conservative by nature and a former Berlusconi acolyte. If the result is close, and if he does well, he might emerge as a compromise candidate for prime minister, attracting support not only from the Ulivo but also from disillusioned moderate members of Forza Italia.