ROME (Reuters) - President Sergio Mattarella called on Monday for Italy’s bickering parties to rally behind a “neutral government”, saying the only alternative would be a swift re-vote after March’s inconclusive election.

Italian President Sergio Mattarella meets Forza Italia leader Silvio Berlusconi at the Quirinale Palace, in Rome, Italy, May 7, 2018. Italian Presidential Press Office/Handout via REUTERS

However, Italy’s two largest parties, the far-right League and anti-establishment 5-Star Movement, rapidly came out against the proposal, raising the likelihood of an unprecedented immediate return to the polls, even as early as July.

Italy has been stuck in political limbo since the March 4 ballot, which saw 5-Star emerge as the single largest group while an alliance of rightist parties, including the anti-immigrant League, took the most seats.

However, both fell short of an absolute majority, and, after a third round of consultations with all the main party leaders, Mattarella conceded on Monday that there was no room for a coalition deal in the eurozone’s third largest economy.

However, he urged politicians to rally around a “neutral” administration, which he will appoint this week.

If it gains parliamentary backing, it will draw up a 2019 budget to stave off the threat of an automatic increase in sales taxes that would be triggered if the deficit slips. It would then resign in December to open the way for elections in the spring - when all post-war votes have been held in Italy.

“Let the parties decide of their own free will if they should give full powers to a government ... or else new elections (should be held) immediately in the month of July or the autumn,” Mattarella said in a televised statement.

Both the League and 5-Star, which have enough seats between them in parliament to prevent any government from winning the confidence votes needed to take office, rejected the formation of a non-partisan administration.

“(We have) no faith in a “neutral government”, which is synonymous with a government of technocrats. We are going to vote in July,” 5-Star chief Luigi Di Maio wrote on Twitter.

League leader Matteo Salvini echoed the sentiment: “There is no time to lose, there is no space for technocrat government.”

BERLUSCONI CAUTION

YouTrend pollsters said that, under Italian law, the earliest likely date for an election would be July 22, a time when many people will have left for their summer holidays, which could have a major impact on the outcome.

Di Maio has previously said he would be ready to form a government with the League. However, he has refused to enter into any coalition deal with the League’s main ally, the Forza Italia party led by former prime minister Silvio Berlusconi, whom 5-Star considers a symbol of political corruption.

Salvini has refused to abandon Berlusconi, saying that would break his word with voters after they had stood together at the polls and presented a common manifesto.

In a statement, Berlusconi’s Forza Italia party said it wanted to discuss the situation with its allies and warned against a rush to the ballot box in July.

“We are not afraid of an election, but a summer (vote) does not help turnout. Autumn is better,” Forza Italia said.

Whatever path the parties chose, Mattarella said Prime Minister Paolo Gentiloni’s caretaker government had reached the end of its life, indicating he would appoint a new administration even if it could not win parliamentary backing.

Gentiloni is a leading figure in the center-left Democratic Party which had ruled Italy since 2013 but was roundly beaten in March, as voters punished it for the sluggish economic recovery, growing poverty and a surge in migrant numbers from Africa.

Mattarella is expected to announce who he would like to lead the non-partisan administration some time before Friday and he urged parliamentarians to show responsibility, warning that a new vote might easily throw up another inconclusive result.

“I call on the political parties to support this transitory government. If they don’t, it will oversee the new election. It would be the first time in the history of the republic that a legislature ends before it has even started,” he said.