By Barry Moody
ROME (Reuters) - Billionaire showman Silvio Berlusconi has again astonished Italy with a storming comeback that has frayed nerves in European capitals and among investors, but the signs are his final gamble has failed.
The 76-year-old media magnate and four-times prime minister looked down and out for much of 2012 after a jeering crowd hounded him from office in November 2011 as Italy tottered towards a Greek-style debt crisis.
His indecision over whether to stand in this weekend's election brought his People of Freedom Party (PDL) to the brink of disintegration.
But since precipitating the fall of his successor, technocrat Mario Monti, in December and diving into the campaign, the former cruise ship crooner has shown unrivalled mastery of communication and energy belying his age.
"Berlusconi was a poor prime minister but is a very tough campaigner, he never gives up," said analyst Massimo Franco.
Italy's longest-serving prime minister, who has a gift for off-the-cuff humor, has run rings around both the professorial Monti and colorless center-left frontrunner Pier Luigi Bersani in the charisma stakes.
However, most pollsters think Berlusconi still lags Bersani and that in the last few days of the campaign the center left may in fact be increasing a gap which stood at around 5 percentage points when a polling blackout began on February 9.
Berlusconi is believed to be suffering at the hands of another populist crowd pleaser, anti-establishment 5-Star Movement leader Beppe Grillo, who is riding a wave of popular disgust with traditional politicians.
Grillo's success - some analysts believe he may reach 20 percent and overtake the PDL - could undermine Berlusconi's bid to win enough Senate seats to paralyze a center-left-led government that is likely to make a ruling alliance with Monti.
If Berlusconi does indeed fail, despite a remarkable campaign, many pundits believe he will gradually fade and eventually lose leadership of the centre right that he has headed for almost 20 years.
Berlusconi is one of the most extraordinary characters to come out of Italy's often bizarre political landscape, possessing a unique mix of political talent, brazen behavior and propensity for diplomatic gaffes that led to his virtual ostracism from European summits before his fall in 2011.
As he climbed the ratings in recent weeks, the nervousness in European capitals, particularly his favorite target Germany, was palpable.
But calls by European politicians to vote for Monti and not Berlusconi have only played into the former premier's hands, creating resentment at foreign interference and damaging the outgoing prime minister.
Berlusconi had for years seemed virtually immune to controversies that would have destroyed a politician in many parts of the world. He has survived up to 30 prosecutions for fraud and corruption and is currently on trial for having sex with an underage prostitute during lurid "bunga bunga" parties.
His wife Veronica left him 2009, accusing him of consorting with underage women, and was awarded a settlement of 100,000 euros ($132,200) a day. But he even made campaign jokes about that.
The perma-tanned media tycoon has been mocked outside Italy for his facelifts, hair transplant and obvious make-up but has shown an enduring ability over the last month to appeal to a large body of conservative voters, especially middle-aged women.
At a campaign rally in Milan on Monday the adoring crowd chanted "Silvio! Silvio!" One woman admirer shrugged off the sex scandals, saying women "throw themselves on him."
Earlier this week, a 30-year-old woman demanded he apologize for suggestive remarks he made to her at a public event, saying they had reduced her 13-year-old daughter to tears.
But Berlusconi possesses keen political instincts that enabled him to hit issues that have traction with voters, unlike Monti who failed to run a good campaign as a centrist, and Bersani, a boring orator and lackluster campaigner.
Berlusconi attacked Monti's hated housing tax, a sure-fire winner with voters suffering in a deep recession, and recently stepped up the heat by offering to pay it back. He has accused Monti of being a puppet of German Chancellor Angela Merkel and imposing austerity at Berlin's orders.
But he has consistently showed himself to be better at promises than action, failing to implement pledges to liberalize an inflexible and uncompetitive economy despite his landslide third election victory in 2008,
Berlusconi, one of Italy's richest men, burst into politics in 1994, creating his own party almost overnight to fill a void on the right caused by a huge corruption scandal that swept away traditional parties including the Christian Democrats.
He billed himself as a new force different from traditional politicians but now ironically looks like being pushed aside by the rise of Grillo, like him 20 years ago, a new element in a tired political landscape. ($1 = 0.7563 euros)
(Editing by Robin Pomeroy)