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Italy's anti-establishment 5 Star Movement and the far-right League were reportedly on Thursday close to forming a new coalition government.

Italy's President Sergio Mattarella granted the League and the 5-Star Movement (M5S) one more day to negotiate a government deal in Italy.

Thus far the leader of the far-right Lega has refused to drop his ally, Silvio Berlusconi, to join an M5S government as a junior coalition partner.

5-Star leader Luigi Di Maio is calling for snap elections in July, and said on Tuesday he had "stopped hoping" there would be any change in the position of Berlusconi or the League.

"It certainly won't be us who imposes vetoes", Berlusconi said in a statement, adding that although he would not support this new coalition in parliament, his partnership with the League would still continue at a local level.

The two groups, which are hostile to European Union budget restrictions and have made electoral pledges that would cost billions of euros to implement, finally entered into negotiations on Wednesday just as a swift return to the polls looked inevitable.

In a joint statement after meeting on Thursday, Mr Di Maio and Mr Salvini described a "positive climate to define the government's agenda and priorities" and said "technical" meetings among staff would begin in the afternoon.

With talks ongoing today, the parties have asked President Sergio Matterella to give them until Monday to strike a deal.

The March vote saw a center-right alliance, which includes Forza Italia and the League, winning the most seats, while 5-Star emerged as the biggest single party.

Later Thursday Salvini took to Twitter saying, "We are working for you", with a photo of him posing next to a giant bulldozer.

Berlusconi said he would not back a parliamentary vote of confidence for such an administration "but we would calmly and without prejudice assess the work of the government", adding that he would "loyally support" laws in line with the center-right's program.

It is unclear when the two parties, which between them won more than 50% of the March vote, will announce their programme and cabinet lineup.

The same survey showed 5-Star and the Democratic Party (PD), which has ruled for the last five years, broadly unchanged from their March 4 results on 32 percent and 19 percent respectively.

The scandal-ridden former prime minister said on Wednesday that he would not oppose an alliance between the League and Five Star, removing the main obstacle to the a Five Star-League tie-up.

The alternative could be fresh elections as early as July.


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