By James Mackenzie
ROME (Reuters) - Italian center-right leader Silvio Berlusconi is struggling to control his divided party ahead of a meeting on Saturday that could confirm a deepening split in its ranks and threaten the stability of Prime Minister Enrico Letta's fragile coalition.
After months of tension between rival factions, the congress, which will seal the rebranding of Berlusconi's People of Freedom group (PDL) into Forza Italia, the name of his original political movement, could be the moment that decides the future of the party.
With frantic meetings and telephone calls still underway on Friday, a truce could be patched up before it comes to a showdown, but the tensions have underlined the instability still threatening Italy despite an uneasy truce following Berlusconi's failed attempt to bring down Letta's government last month.
Berlusconi, facing near-certain expulsion from parliament after his conviction for tax fraud in August, has demanded that PDL ministers quit the government where they have shared power with Letta's center-left Democratic Party since last February's deadlocked election.
He has been defied by a moderate group around former PDL secretary Angelino Alfano, which could eventually break away into a new party and which has been engaged in bitter sniping with hardline "hawks" loyal to Berlusconi.
The venom has worsened an already difficult climate for Letta, with the constant bickering over Berlusconi's legal problems and issues like the hated IMU property tax preventing any sustained attempt at economic reform.
Berlusconi, furious over the conviction which he says was politically motivated, has been further enraged by the rebellion, which has posed the most serious threat to his authority since his entry into politics two decades ago.
However it may not be until November 27, when the Senate is due to vote on stripping him of his seat in parliament after the tax fraud conviction, that the final crisis erupts.
"We're looking at two separate groups, each one pursuing its own political objectives but despite this, we're not yet at breaking point," said one source close to the government.
Economic data this week showed Italy still stuck in a recession that has lasted more than two years and the infighting underlined what President Giorgio Napolitano referred to on Thursday as a "venomous and unstable" political climate which has blocked reform.
The uncertain future facing Berlusconi, the dominant figure in Italian politics for the past two decades, has thrown his party into confusion which is likely to deepen as the November 27 vote approaches.
Saturday's unusual party congress will see 850 members gather to hear a speech from Berlusconi, but it is not expected to see any debate between the two sides and is unlikely to bring much clarity.
Alfano has insisted that a break with the government now would only play into the hands of the center-left, which has been boosted in opinion polls by the infighting on the right.
In addition to losing his seat in parliament, Berlusconi, his party's only proven vote winner, faces a year in community service and a two-year ban on holding public office ordered by a Milan court and would be ineligible to run in any election held next year.
Letta himself has said repeatedly that the humiliating reverse inflicted on Berlusconi when Alfano's rebels forced him to back the government in a confidence vote on October 2 shows he would have the numbers in parliament to survive even if the PDL breaks up.
But in the feverish climate of intrigue and backroom dealmaking in parliament, it is unclear how many center-right lawmakers are genuinely prepared to break away from Berlusconi, the man who has determined most of their political careers.
"There's a lot of confusion about the numbers and they're all basically unreliable because a lot of people have been signing pledges for both sides," said one center-right official.
(Additional reporting by Paolo Biondi; Editing by Giles Elgood)