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Italian Prime Minister Matteo Renzi talks during a joint news conference with European Commission President Jose Manuel Barroso at the end of a meeting at Villa Madama in Rome July 4, 2014. REUTERS/Remo Casilli


By Massimiliano Di Giorgio

ROME (Reuters) - Italy's ruling Democratic Party (PD) on Monday cancelled a meeting with the anti-establishment 5-Star Movement (M5S) to discuss fundamental reforms, with each side blaming the other for the failure to meet.

The setback with M5S may increase the chances that Prime Minister Matteo Renzi will concentrate on sealing a deal with centre-right leader Silvio Berlusconi to help push through changes to Italy's political system.

The agreement to meet was a U-turn for former comedian Beppe Grillo's M5S, which had previously refused to talk to traditional parties. It also indicated the PD did not feel bound to the deal made with its historic rival Berlusconi.

The electoral system is widely blamed for creating political deadlock, contributing to widespread voter disillusionment that helped propel Grillo's party to 25 percent of the vote in its first general election last year.

Renzi's PD said M5S had failed to provide written responses to a series of questions about its reform proposal.

M5S presented its own updated proposal at a news conference in Rome where the vice president of the chamber of deputies, Luigi Di Maio, one of its most prominent members, expressed regret that the meeting had not occurred.

"We are sorry to have missed an important opportunity. Our ideas are clear - on the other side there is a lot of confusion," Di Maio said.

Renzi reached a preliminary agreement over the electoral law and abolishing the Senate as an elected chamber with Berlusconi in January, but Berlusconi has threatened to pull out of the deal several times, and the proposals have made slow progress in parliament.

Beppe Grillo said on his blog that Renzi preferred closed-door meetings with Berlusconi, and referred to the fact that the premier was not elected to the top job but had replaced his predecessor in a party coup.

"We see that a democratic and transparent debate is impossible in Italy today," Grillo wrote. "The M5S represents millions of Italian who cannot be treated like pariahs ... by people who were never elected in free elections."

He later said M5S was still open to discuss reform proposals.

Grillo's party came second to the PD in European elections in May, losing ground after its resounding success in the general election, but still more than four percentage points ahead of Berlusconi's Forza Italia.

M5S's electoral reform proposal aims to ensure representation for small parties but it also includes a run-off between the two highest scoring parties if neither gets 51 percent in the first round, and a bonus of extra seats for the victor.

The two-round system is an aspect insisted on by Renzi which M5S had previously rejected.

Renzi took to Twitter to repeat the PD's call for M5S to explain their proposal in writing:

"This isn't a joke, these are the rules! We are asking for a written document, to work out whether people who want to be constructive prevail in the M5S, or just those who shout."

(Writing by Isla Binnie; Editing by Robin Pomeroy)

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