Merkel Congratulates Prodi on Election Win

"She congratulates Mr Prodi and looks forward to working with him," a spokesman for the German government told AFP.

"She is expecting the formation of a new government in Italy to give fresh impetus to bilateral relations and to cooperation on important tasks that lie ahead within the European Union," he added.

Italy has been gripped with political uncertainty after Prodi seized the narrowest election victory in living memory and outgoing Prime Minister Silvio Berlusconi refused to concede defeat.

Berlusconi losing support

Allies of Berlusconi distanced themselves Thursday from his claim of widespread vote-rigging in Italy's general election. An initial scrutiny of the ongoing review of contested votes suggested late Thursday the result would not be overturned.

Prodi's Union said in a statement that the recount "is demonstrating the validity of the poll result."

Berlusconi, who initially demanded a recount of 43,000 contested votes after Prodi won, called for a wider check of returns from all 60,000 polling stations, as well as more than one million votes

deemed invalid.

"The result must, and will, change because there has been endless vote rigging in different places, all over Italy," said Berlusconi after meeting President Carlo Azeglio Ciampi late on Wednesday.

Italian newspapers said the prime minister had hoped to get Ciampi to sign a decree extending the recount to include more than a million spoiled votes, but Ciampi is believed to have refused.

Another of the prime minister's allies, Lorenzo Cesa of the Christian Democrat UDC party, said of the recount: "I don't believe it will change the outcome of the election."

Prodi pressing ahead

Prodi pressed ahead with talks with his coalition partners on forming a government, and sought to give an impression of a smooth transition to power.

He said that after Berlusconi's latest fraud allegations he had made a late-night phone call to Interior Minister Giuseppe Pisanu, whose ministry was responsible for overseeing the vote.

"Relax, and have a good Easter," Prodi said Pisanu had told him.

"The situation seems calmer, because I know there's nothing to worry about. We need patience, but in the end, this is democracy," he told journalists.

In addition to Germany, Britain and Brazil have joined the growing number of countries acknowledging Prodi's election victory.

However, there have been no congratulatory phone calls yet from US President George W. Bush -- an ally of Berlusconi -- and Pope Benedict XVI.