By Gavin Jones and James Mackenzie
ROME (Reuters) - Italian center-left leader Matteo Renzi promised on Monday to reform an electoral system blamed for creating chronic political deadlock, defying party critics who had attacked him for sealing a deal on the proposals with arch-enemy Silvio Berlusconi.
The 39-year-old mayor of Florence, who won the leadership of the Democratic Party (PD) in December, said he would eliminate the fragmentation that has made it impossible for successive Italian governments to survive a full term in office.
"We are saying no to giving small parties the power of holding us hostage," he told a meeting of the PD party leadership, which approved the proposals by 111 votes in favor with 34 abstentions but no votes against, despite criticism from some on the left of the PD.
"I don't rule out alliances but only if they're made for governing, not just winning an election," he said, adding that settling the thorny issue of voting rules would clear the way for vital economic reforms.
Analysts say electoral reform is vital for Italy to achieve the stable government needed to reform a chronically sluggish economy that has not grown for over two years and tackle the euro zone's second highest debt burden after Greece.
In last year's election, no party gained enough votes to govern alone, plunging the country into stalemate before the creation of a broad-based coalition government which has constantly bickered and struggled to produce reforms.
The proposals would see a party or coalition that won an election with at least 35 percent of the vote boosted by a winner's bonus of up to 18 percent that would give it a majority in parliament of between 53-55 percent.
If no side won at least 35 percent, a second round vote would be held between the two biggest groups with the winner awarded a majority of at least 53 percent.
The proposals would leave one widely criticized element of the current system in place, the so-called "blocked lists" that allow party bosses the power to appoint candidates.
But it would replace the current single nationwide list with a series of 120 electoral colleges in which the candidates would be chosen by primary and more clearly identified, answering objections from Italy's top court which has ruled the single list system unconstitutional.
In a separate move, which Renzi said could be approved by the party by mid-February, he proposed cutting the powers of local regions by reforming Article 5 of the constitution, removing most of the Senate's powers and transforming the upper house into an unelected chamber for regional issues.
Such changes would require parliamentary approval and constitutional amendment, a lengthy process which should ensure that the current left-right coalition led by Prime Minister Enrico Letta survives until at least 2015.
Renzi, a dynamic and ambitious young politician and a gifted communicator, has pressed ahead with the proposals despite marked hostility from many sections of the left suspicious of his impatience with many of the party's traditional values.
He warned against attempts to water down the package, which he said were not "a la carte reforms" and said his victory in the party primary gave him full legitimacy to act.
Renzi's meeting on Saturday with Berlusconi, the leader of the center-right Forza Italia party who is barred from parliament after a conviction for tax fraud, sparked unease within the PD and small parties backing Letta's government.
Stefano Fassina, from the left-wing of the PD, who resigned as deputy economy minister this month after a dispute with the more moderate Renzi, said he was "ashamed" to see Renzi meet a convicted criminal at the PD's headquarters.
Renzi dismissed the criticism as "quite bizarre", saying there was no way round consulting Berlusconi on the issue, which will require broad consensus in parliament. "Berlusconi is the head of the center-right ... it's just a fact," he said.
For his part, Berlusconi welcomed Renzi's proposals. "We want to achieve a clear two party system in a climate of clarity and mutual respect," he said in a statement.
However they have been regarded with some suspicion by small governing parties, including the New Center Right (NCD) of Deputy Prime Minister Angelino Alfano and the Civic Choice of ex-premier Mario Monti, which fear being eliminated.
Alfano said he would be willing to agree as long as they awarded the winner's bonus to a coalition and not a single party, kept the threshold for entering parliament no higher than 4 percent, ended the single "blocked list" system and made each electoral coalition identify its candidate for prime minister.
"Even three out of four would be enough, otherwise there'll be the risk of a government crisis," he told Radio 24.
Renzi, who makes no secret of his ambitions to become prime minister, frequently criticizes Letta - who is also from the PD - and says he is determined to push ahead with electoral reform even if it increases strains among the ruling coalition.
(Additional reporting by Valentina Consiglio; Editing by Alison Williams)