Premier Romano Prodi on Tuesday held talks with allies in his centre-left coalition on changing Italy's electoral system, a reform seen as essential for improving political stability in a country which has been through more than 60 postwar governments.
Prodi told reporters after the reform summit that it had "gone well" but gave no details.
But his Union coalition issued a statement saying that party chiefs had "positively assessed" a proposal drawn up by Parliamentary Relations and Institutional Reform Minister Vannino Chiti.
"The bill aims to guarantee bipolarity, pluralism, governability and balanced representation," it said.
Chiti said the reform would seek to reduce the proliferation of small parties and introduce a more direct relationship between voters and MPs.
Prodi heads a nine-party coalition which ranges from Communists to Catholics.
An electoral reform pushed through parliament by his predecessor Silvio Berlusconi just four months before the April 2006 election controversially returned Italy to full proportional representation (PR) after a break of 13 years.
The new voting system assured Prodi a workable majority in the House but not the Senate, where the premier holds two more seats than the Berlusconi-led opposition.
This precarious situation has left Prodi weak and at the mercy of the numerous small parties in his fractious alliance and their conflicting demands.
Prodi briefly resigned in February after the government lost a Senate foreign policy vote.
The premier survived the ensuing crisis but President Giorgio Napolitano subsequently called on parliament to swiftly approve electoral reforms to boost political stability and governability.
Both the government and the opposition have since said a new law is a priority and on Monday, Berlusconi also consulted his allies on a reform proposal.
The premier has stressed he will not attempt to follow Berlusconi in "imposing" a proposal against the opposition's will.
Prodi said recently that he would like to replace PR with a system based on first-past-the-post contests in individual constituencies.
However, such a system is unlikely to win the support of the small parties in his coalition, six of whom gained less than 2.6% of the vote in the last general election.
NEW SYSTEM UNDER FIRE FROM BOTH SIDES.
The reform approved in December 2005 on the votes of the centre right alone has been criticised as complex and muddled and been blamed by parties on both sides for creating instability and the risk of hung parliaments.
One of the authors of the bill, Northern League heavyweight and former reform minister Roberto Calderoli, himself once famously dismissed the reform as "crap".
Under the new system, voters cannot choose candidates, only parties.
Bonus House seats are given to the winning coalition in the event of a close outcome, as was the case with Prodi, who won the narrowest of victories against Berlusconi.
The reform also provided for a number of thresholds, under which parties and coalitions could not be represented in parliament.
Parties belonging to a coalition need to win at least 2% of the national vote in order to have representation in the House. Those standing alone have to get 4%. Meanwhile, coalitions must win at least 10% to be represented.
There are three similar thresholds for the Senate but the percentages are different: 3%, 8% and 20%.
However, the votes gained by parties with less than 2% of the national vote still count towards their coalition's overall tally.
There is also nothing to prevent the winning coalition assigning such parties seats.
Foreign Minister Massimo D'Alema, who is also deputy premier, said on Tuesday that "the electoral law is, to use the words of Calderoli, crap and therefore, the more it is changed, the better".
But Berlusconi defended the law on Monday, saying it was "good".
He said only a few adjustments were required, such as one giving bonus seats to the winners of Senate elections as well as the House.
Both coalitions, however, are keen to agree on a reform before a referendum campaign gets under way and takes the issue out of their hands.
The referendum is being promoted by a 158-strong committee which includes civil rights activists and politicians from both sides and its main aim is to force parties to run singularly rather than in coalitions.
With the application of cut-off thresholds, this would slash the number of parties in parliament, eliminating the smaller ones, and encourage parties to merge.
