(Releads with Berlusconi clarification)

NAPLES, Italy, Oct 10 (Reuters) - Italy’s Prime Minister said on Friday there was talk of suspending markets but later played down the idea that this was a serious policy suggestion.

Asked what European Union leaders might discuss if they meet in Paris this Sunday, Silvio Berlusconi told a news conference: “There is talk of suspending markets for the time needed to rewrite (international finance) rules.”

After the press conference was over and reporters asked for more details, he replied: “No, no, no. It was a pure hypothesis like when you say: ‘let’s suspend Basel 2’ or ‘let’s do another Bretton Woods’. It was a hypothesis that was never mooted by any leader, least of all me.”

Berlusconi said European Union leaders would meet on Sunday in Paris to discuss the financial crisis and they could ask for an emergency Group of Eight summit. In Paris, French President Nicolas Sarkozy, who holds the rotating EU presidency, said he was considering calling such a meeting but had not yet decided.

During the news conference, held after a weekly cabinet meeting, Berlusconi urged shareholders not to sell stakes in Italian companies that were fundamentally sound.

“The stock markets are currently in the grip of panic and madness,” Berlusconi said. “If you have shares, absolutely don’t sell them.”

Berlusconi said his government and the Bank of Italy had asked banks not to call in loans and to continue to lend to industry in a country which he said was not yet in recession but would feel knock-on effects of the global financial crisis, including a drop in consumption and exports.

Employers federation Confindustria has said it believes Italy is in recession.

Berlusconi urged investors to buy shares of energy companies Eni ENI.MI and Enel ENEI.MI, saying the former would end the year with extraordinary results.

“I have often been accused of being a salesman,” said Berlusconi, one of Italy’s most successful and richest businessmen. “I think however that I am doing my duty as prime minister, spreading not panic but calm and keeping a cool head for everyone.” (Writing by Robin Pomeroy; Editing by Ruth Pitchford)