Jan. 24 (Bloomberg) -- Italian Prime Minister Romano Prodi probably will lose a Senate confidence vote and resign today, prompting either early general elections or a move to overhaul the country's voting system.

Former Prime Minister Silvio Berlusconi is leading in opinion polls, giving his pro-U.S., pro-business opposition an edge if a quick election is called. The failure of Prodi's government likely would sink plans to cut poor workers' taxes. Italy, which has the world's third-largest debt after the U.S. and Japan, has been fraught with political instability since World War II, with an average of one government crisis per year.

Prodi, 68, asked senators in Rome for their support as he opened a debate that precedes a vote at about 8 p.m. The defection of a coalition ally, the Udeur party, put his government on the verge of collapse less than two years after it won the last national elections.

The loss of Udeur's three senators removes Prodi's one-seat majority, making it unlikely he can muster enough elected senators to his cause. He won a similar vote yesterday in the Chamber of Deputies, where he has a more comfortable majority.

``Prodi's putting up a fight because he has nothing to lose,'' said Franco Pavoncello, a professor of politics and president of Rome's John Cabot University. ``But the numbers probably aren't there.''

Teetering on the Brink

The confidence vote will be the 33rd of Prodi's premiership. His government has been teetering on the brink of collapse ever since his nine-party coalition won the closest elections in modern Italian history in April 2006.

Defeat today would force Prodi to offer his resignation to Italian President Giorgio Napolitano, who is required by the constitution to seek another government before dissolving parliament and calling elections.

``I ask for confidence from each one of you so that the government can renew its reform program, which is what the country needs,'' Prodi said in the Senate. ``Stopping this government now is a luxury that Italy can't afford.''

Berlusconi, 71, has called for an early vote. Berlusconi's alliance leads Prodi's coalition by 9 percentage points in opinion polls, according to polling company SWG Srl.

``The most likely solution to this crisis seems to be early elections,'' Matteo Radaelli, an economist at Rasbank SpA in Milan, said in a Bloomberg Television interview. ``The possibility of an interim government seems to have been dismissed by most of the biggest political leaders.''

Electoral Changes

Napolitano said in February 2006 that he favored changing Italy's voting system before permitting new elections under existing rules, which favor small parties and contribute to unmanageable multiparty coalitions like Prodi's. In the Senate, Prodi said the poorly drafted electoral law underpinned the instability of his government and must be changed.

``I agree with the president of the republic's request that there not be elections without a new voting law,'' Prodi said.

Former Justice Minister Clemente Mastella's Udeur party won 1.4 percent of the vote, about a half million ballots, in the last national election, and has since threatened to pull out of the government about a dozen times. Prodi's government is the 61st Italy has had in the past 63 years.

The latest crisis erupted when Mastella resigned Jan. 16 after he and his wife were named suspects in a corruption probe. At the time, Mastella said Udeur, a Catholic party he founded, would continue to back the premier. On Jan. 21, he reversed course, saying that allies in the government hadn't shown sufficient support for him in the face of an investigation that he called ``judicial persecution.''

Life Senators

The fall of the government would disrupt a pending election-law referendum that if passed would make it harder for small parties like Mastella's to gain seats in parliament.

If Prodi wins today, his victory likely will depend on the support of six unelected, life senators who were awarded seats to honor their service to Italy. They include Rita Levi Montalcini, a 98-year-old Nobel Prize-winning chemist and Giulio Andreotti, 89, a seven-time prime minister.

Napolitano, 82, a former life senator himself, said last year a government dependent on non-elected senators wouldn't be politically viable, though it would be legal and protected by the constitution.

Berlusconi, were he to return to power, would lead an administration pledging to cut taxes and red tape, promises he failed to deliver when he was in office, from 2001 to 2006. His previous government eased some of Italy's rigid labor laws, helping employment, and began the process of increasing the retirement age.

Deficit Widened

Under Berlusconi, the economy slipped into recession twice, the budget deficit widened and the country's debt, Europe's biggest, increased for the first time in a decade.

On foreign policy, Berlusconi was one of President George W. Bush's closest allies in Europe, backing the invasion of Iraq, a position opposed by more than two thirds of Italians. Prodi pulled Italian peacekeepers out of Iraq.

Prodi's coalition, which ranges from Communist to Catholic parties, has quarreled over everything from pension policy to whether to withdraw Italian troops from Afghanistan. His administration focused on curbing the deficit, raising some taxes and cracking down on tax evasion to bring the budget shortfall within limits set by the European Union for the first time since 2002.

Prodi managed to wrest an agreement out of unions and employers to gradually raise the retirement age. His most recent policy initiatives included proposals for tax breaks for those on low incomes and raising capital-gains taxes to finance that measure.

To contact the reporters on this story: Andrew Davis in Rome at abdavis@bloomberg.net; Steve Scherer in Rome at scherer@bloomberg.net.

Last Updated: January 24, 2008 12:25 EST