By Gavin Jones

ROME (Reuters) - Italy's Prime Minister Silvio Berlusconi is expected to scrape through a vote of confidence on Friday, despite the scandals, economic stagnation and intense pressure from financial markets plaguing him and his administration.

Berlusconi was forced to call the vote, to be held in the Chamber of Deputies early afternoon, after his divided center-right government suffered a major embarrassment when it failed to pass a routine budget provision on Tuesday.

He is seen surviving for now, just as he has survived many such votes, because squabbling factions in his coalition are still not ready to replace him.

"If a group of deputies inside his People of Freedom party had a precise strategy then probably Berlusconi's days would be numbered, but we are not there yet," political commentator Sergio Romano told Reuters.

Voting is scheduled to start at around 1030 GMT, with the result expected after 1200 GMT.

Analysts say even if the 75-year-old premier wins, it will be a matter of months only before a new crisis hits, and the country is likely to hold elections next spring, a year early.

"It's very probable that Berlusconi will win confidence in parliament today," said Massimo Franco in newspaper Corriere della Sera.

"But the anxiety and fatigue of the ruling majority does not point to any revival. If anything, it increases the sense of a government limping toward the terminus, hoping to make it to the end of the year without being forced to stop earlier."

Berlusconi told parliament on Thursday the fall of his government would be "a victory for those who want to see (Italy) fall into decline, catastrophe and the kind of speculation we have seen for months in Europe and Italy".

Many analysts see the opposite as true, and see Berlusconi's ineffectiveness in the face of crisis bringing either snap elections or an unelected government of technical experts, which they say would be preferable to the current malaise.

Nicholas Spiro, head of debt consultancy firm Spiro Sovereign Strategy, said a "Berlusconi premium" had been built into Italy's borrowing costs.

His political demise "could trigger a favorable re-assessment of Italy in the minds of international investors, particularly if a non-partisan technocratic cabinet took office", Spiro said.

DISSENTERS

Several newspaper editorials on Friday highlighted the lack of new ideas in Berlusconi's speech to parliament, describing him as paralyzed by a fear of aggravating tensions in his coalition.

"Not one new thought was expressed. Absolutely nothing. A complete vacuum," said Luca Ricolfi in La Stampa daily. "Berlusconi has by now become a factor that is immobilizing and freezing Italian politics."

A number of center-right deputies were absent from Tuesday's vote, infuriating Berlusconi and feeding suspicions that some stayed away to raise their bargaining power in the coalition.

On Thursday, Berlusconi described the episode as an "accident" and insisted the center-right bloc was united.

He is facing internal challenges from a number of ministers, most notably from Economy Minister Giulio Tremonti, who are unhappy with his leadership and the damage his personal and legal woes have done to Italy's reputation.

The prime minister is on trial in four separate cases, accused of fraud, corruption and paying for sex with a minor.

President Giorgio Napolitano entered the fray this week, expressing deep concern about the viability of government and demanding a "credible response" to Italy's acute problems.

A Reuters survey of about 20 analysts said on Thursday that Italy was already in recession, would barely muster any growth in 2012 and would miss the government's fiscal deficit targets.

Its sovereign debt has been downgraded in the past month by Standard & Poor's, Moody's and Fitch, and since early August it has relied on the European Central Bank to buy its bonds to prevent yields rising to unsustainable levels.

(Additional reporting by Catherine Hornby; Editing by Alison Williams)