After a tough year of personal scandals, three trials, falling ratings and defections from his ruling party, Silvio Berlusconi has set in motion the process of crowning his possible successor from the next generation while leaving open the option of still leading Italy’s centre-right into the next elections.

The 74-year-old prime minister heaped praise on Angelino Alfano, his loyal, 40-year-old Sicilian justice minister, who was unanimously acclaimed in the newly created post of party secretary at a People of Liberty leadership conference in Rome.

Speeches by the two men carried a valedictory air, with both speaking of a “new beginning” although Mr Alfano stressed the party was not in a hurry to see Mr Berlusconi go, insisting that the prime minister was still capable of leading the party into a second term in elections due to be held by early 2013.

At the same time there were calls for reorganising and shaking up the party, with delegates implicitly criticising Mr Berlusconi for his autocratic style of leadership in the wake of disastrous local election losses in May.

Quoting Mr Berlusconi, Mr Alfano said that under his leadership the party had been both “monarchical and anarchic” but that now it had to be run by “rules and sanctions”.

Mr Alfano – whom Mr Berlusconi recently singled out as his protégé in a dinner with foreign reporters – is a controversial choice as author of two laws designed to shield the prime minister from the courts that were later overturned by the Constitutional court.

A lawyer who entered politics at the age of 23 when Mr Berlusconi launched his first campaign in 1994, Mr Alfano returned to that theme, describing him as a man unjustly “persecuted” by the courts. But he also suggested that not all were as honest within the party.

Among the delegates were several under trial or investigation, including Nicole Minetti, the prime minister’s former dental hygienist who was elevated to regional councillor in Lombardy and is on trial accused of procuring prostitutes for “bunga bunga” parties at his private villas. Mr Berlusconi is accused of paying for sex with an underage prostitute. Both deny the charges.

The elevation of Mr Alfano comes at a critical moment for the ruling centre-right coalition as it seeks to push through parliament a three-year austerity budget that was agreed by the cabinet on Thursday and has already been denounced by the main leftwing trade union federation and opposition parties.

A reminder of Italy’s uncomfortable proximity to contagion from Greece’s sovereign debt crisis came from Standard & Poor’s rating agency on Friday. “Substantial downside risks to the government’s debt-reduction plan remain, primarily due to Italy’s weak growth prospects,” it said, warning of an “approximately a one-in-three likelihood” that Italy’s ratings could be lowered within the next 24 months.

Giulio Tremonti, finance minister and architect of the austerity package, also remains in the wings as a possible successor to Mr Berlusconi.

“The ball lies in Tremonti’s court,” commented La Stampa, a Turin daily which, commenting on Mr Alfano’s appointment, said “a transfer of powers” was happening, but without a clear outcome.

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