Austerity-hit Italians take to the polls next week with centre-left leader Pier Luigi Bersani leading the fray against Silvio Berlusconi in a vote that could prove crucial for the future of the eurozone.

Three-time prime minister Berlusconi had been rising fast in the ratings to as little as 2.5 points behind Bersani in one recent poll but might just have been stopped in his tracks by Pope Benedict XVI's shock decision to resign.

"The pope's announcement has really taken the wind out of Berlusconi's sails," political scientist Roberto D'Alimonte told AFP in an interview.

The irrepressible billionaire tycoon had relied heavily on his television performances but media attention has now been diverted firmly to the Vatican.

The final outcome of the February 24-25 vote, the composition of the new government and the direction Italy will take are still far from certain and the polls are being watched closely in European capitals and the financial markets.

The most recent polls indicate Bersani's main Democratic Party and its small leftist ally SEL will easily win a majority in the lower house of parliament, the Chamber of Deputies, but could struggle in the upper house, the Senate.

The Bersani vote is currently estimated at between 33 and 34 percent but D'Alimonte said the somewhat staid 61-year-old former communist has gradually been losing ground and "his best hope is to stay more or less where he is."

A coalition with outgoing prime minister Mario Monti and his disparate group of centrist politicians and civil society figures could be one solution and could give Monti a key role in the new government such as finance minister.

Bersani has promised to stick to Monti's course of budget discipline and structural reforms but has said he will also aim for more "social equity" and will face pressure from trade unions to go easy on free-market reforms.

"We are living through Italy's worst post-war crisis," the cigar-chomping Bersani, who has tried hard to shake off his party apparatchik image by surrounding himself with young people and women, said at one recent rally.

While his programme has been short on solutions, Bersani has promised to recognise gay civil unions, reform laws to allow children of immigrants to have citizenship and cut defend spending to pay out more for schools and hospitals.

In a dig at the scandal-tainted Berlusconi, Bersani has also vowed to re-introduce laws against false accounting which was de-criminalised by the media magnate in a move widely seen as an attempt to ease his own legal woes.

Analysts say a Monti-Bersani alliance might prove unstable because it would combine the free-market advocates and Catholic community leaders in Monti's grouping with radical leftists from SEL -- "Left, Ecology and Freedom".

Former economics professor Monti is polling at between 10 and 14 percent but his vote could come under pressure from a spate of economic bad news.

Unemployment has risen to a record 11.2 percent during his 15 months in office and the recession has worsened, with the economy shrinking by 0.9 percent in the fourth quarter compared to 0.2 percent in the third quarter.

A potential wild card in the election is comedian-turned-politician Beppe Grillo, who has been drawing crowds across Italy with a grassroots campaign that appeals to many disgruntled voters crippled by recent austerity measures.

D'Alimonte said Grillo, whose acolytes are referred to as "grillini", could garner as much as 20 percent of the vote, which would put his Five Star Movement in third place behind Bersani and Berlusconi and ahead of Monti.

"Recently, Grillo has also been stealing votes away from Berlusconi" -- not just the left, D'Alimonte said, adding that this might favour Bersani.

Grillo has really been the only major player in the election to hit the campaign trail with what he has called a "Tsunami Tour" around the country.

Two more potential "spoilers" in the vote are Antonio Ingroia, a former anti-mafia prosecutor who appeals to traditional leftists, and Oscar Giannino, an eccentric pro-business journalist who is taking votes from Berlusconi.

The key to the result will be the Senate, whose composition is based on party scores per region. The main battlegrounds of the Senate vote are the Lombardy and Venice regions in the north and Campania and Sicily in the south.

One factor counting against all candidates is the fact that the elections are being held for the first time in recent memory in winter, which combined with general disillusionment with politicians could mean a low turnout.