Polls close in crucial British by-election

LONDON: Polls closed in the southern English town of Eastleigh on Thursday in a by-election for a new member of parliament in a tight contest that threatens serious repercussions for Britain's main parties.

The election pits Prime Minister David Cameron's Conservative Party against its junior coalition partner, the Liberal Democrats, while the anti-EU UK Independence Party (UKIP) is hoping to capitalise on voter disillusionment. First results are expected around 0200 GMT.

The election was sparked by the resignation of disgraced former energy minister Chris Huhne, a Liberal Democrat who has pleaded guilty to trying to avoid a speeding fine.

Nick Clegg, the embattled deputy prime minister and Lib Dem leader, has called it a "two-horse race" between his party and the Conservatives, while UKIP leader Nigel Farage predicted a "big" swing to his party.

The Lib Dems have been damaged by an ongoing sex scandal surrounding the party's former chief executive Chris Rennard, and the vote looks set to cause ructions within an already strained coalition, whatever the result.

On the eve of polling, Cameron urged Conservatives to back candidate Maria Hutchings, who vowed to help "get the country back on its feet" if she won.

But senior Conservative David Davis warned that a loss for the party would place serious doubt over Cameron's leadership of the party.

"If we came third it would be a crisis," Davis told BBC television. "And if it's a close second with UKIP on our tail it will also be uncomfortable."

More than 79,000 people were eligible to vote for one of the 14 candidates, and residents have been subjected to incessant campaigning since the election was called after Huhne's resignation on February 5.

Clegg visited Eastleigh on Wednesday to pledge his support for candidate Mike Thornton, saying he was on the "cusp of a great, great victory".

Addressing supporters at Lib Dems headquarters, Clegg called the race the "most exciting and closely contested by-elections" that he could remember.

Farage backed his candidate, Diane James, to "come up on the rails" and cause a major shock.

"If you gave me evens on us gaining more than 20 percent in this by-election I would have a very big bet," he said. "This is the campaign that has got momentum."

John O'Farrell, the candidate for the main opposition Labour party, is fighting not to finish in fourth place, and said he hoped voters would register their dissatisfaction at living standards by voting for his party.

-AFP/ac

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Man-and-woman Mars trip by 2018? Can you say 'couples counseling'?

An artist's concept of a proposed Mars flyby spacecraft equipped with an inflatable habitat module.

(Credit:
Inspiration Mars)

A wealthy space tourist announced plans today to launch a high-risk manned flight to Mars in 2018, sending a man and a woman on a bare-bones 501-day round-trip flyby, passing just 100 miles above the Red Planet before heading back to Earth.

Dennis Tito, the first private citizen to fly aboard the International Space Station, said he will provide two years of funding to support the Inspiration Mars Foundation, a nonprofit he started to execute the proposed venture. Additional money will be raised from private sources.

"We have 50 years of experience," he told reporters during a news conference. "We can do things a lot faster, we just need a commitment. I'm not worried about getting this done from that standpoint. The vehicles are there, we have time to get it together."

In a statement, Tito said his organization is "engaging the best minds in industry, government, and academia to develop and integrate the space flight systems and to design innovative research, education, and outreach programs for the mission."

"This low-cost, collaborative, philanthropic approach to tackling this dynamic challenge will showcase U.S. innovation at its best and benefit all Americans in a variety of ways."

But building a reliable, affordable spacecraft in five years is just one issue facing mission planners. Spending nearly one-and-a-half years in the weightless environment of space poses a variety of health risks for the two-person crew, along with an increased risk of cancer due to the effects of space radiation.

And then there's the psychological stress associated with extended confinement in a vehicle the size of a motor home.

Homer Hickham, author or "Rocket Boys/October Sky," said in a Twitter posting: "A married couple in a bathroom for 501 days? I love my wife but rather take my cat and some good books."

He joked that a book about the trip might be titled "Murder on the Martian Express."

Homer Hickham, author or "Rocket Boys/October Sky," said in a Twitter posting: "A married couple in a bathroom for 501 days? I love my wife but rather take my cat and some good books."

But Jon Clark, a former NASA flight surgeon whose wife, Laurel Clark, perished in the 2003 Columbia disaster, said exhaustive screening procedures will be used to select candidates with excellent health, technical competence, and psychological stability.

Preflight training and well-established exercise protocols will help offset the effects of prolonged exposure to microgravity, but space radiation remains a major concern. Clark said NASA will not consider a mission that could result in a 3 percent excess cancer mortality rate over a lifetime.

The proposed Mars flyby mission is "in that ballpark," said Clark, who is working with the Inspiration Mars Foundation. "So, the real issue here is understanding the risk in an informed capacity. The crew would understand that. Ultimately, that is going to be the decision based on that informed consent."

Taber MacCallum, the chief technical officer for Inspiration Mars and CEO of Paragon Space Development, said it's "the kind of risk America used to be able to take."

"That's the kind of bold thing we used to be able to do, we don't do that anymore," he said. "We've shirked away from risk. I think just seriously contemplating this mission recalibrates what we believe is a risk worth taking for America."

As for the challenge of developing a manned flyby spaceraft in just five years, MacCallum said "American industry is up to this challenge."

"There are lots of options and ways to get this done," he said. "We have an amazing industrial base and it's about time America stood up and proved to the rest of the world we've got, bar none, the best industrial base in the world. Let's show it to them. Let's do this mission."

The SpaceX Dragon cargo ship as seen from the International Space Station in May. The company is working on a manned version of the capsule, a variant of which might be suitable for the Mars trip.

(Credit:
NASA TV)

The proposed trip would take advantage of a relatively rare alignment between Earth and Mars, allowing a spacecraft to follow a fast "free-return" trajectory.

Assuming a launch on January 5, 2018, the spacecraft could reach Mars in 228 days and simply loop around the planet, using gravity to fling it back toward Earth. The return trip would take 273 days and end with re-entry on May 21, 2019, at a record velocity of 31,000 mph.

The crew would rely on a closed-loop life-support system, recycling water, urine, and sweat using technology similar to that aboard the International Space Station.

While a specific mission architecture has not been established, the two-person crew likely will live and work in an inflatable habitat module attached to the capsule used for launch and entry. The idea is to utilize current technology with a minimum of automation, relying strongly on the crew's ability to operate the spacecraft and make repairs as needed.

Tito said a variety of launch vehicles should be available, including a proposed heavy-lift booster planned by Space Exploration Technologies, or SpaceX. The company also is working on a manned version of its Dragon cargo capsule, a variant of which might be suitable for the Mars trip.

Once on the way to Mars, the crew would not be able to abort and make a quick return to Earth if something went wrong. They would be committed to the full-duration 501-day mission.

MacCallum said mission planners are considering a 1,200-cubic-foot spacecraft, half of which would be filled with food, water, life-support equipment, and spare parts. The crew would have about 600 cubic feet of living space.

Tito did not have a realistic cost estimate, but he said he expected it to be in the range of a robotic Mars mission. NASA's twin Mars Exploration Rovers cost about $400 million each, while the more sophisticated Curiosity rover currently at work on the Red Planet cost some $2.5 billion.

"It uses low-Earth orbit architecture and we're just adapting it, in effect, to a very large Earth orbit that...just happens to go out pretty far," Tito said. "But you're really flying this mission without a propulsion system on the spacecraft, it's in the most simple form.

"Compared to, say, the landing missions, even if you could contemplate what an overall landing mission to Mars might cost or even in today's dollars what the Apollo missions cost, you're talking a factor of a hundred (less). This is really chump change."

Whatever the final price tag of the proposed manned flyby mission, Tito said he welcomed the opportunity to raise money, joking that media rights alone would be worth a fortune.

"Dr. Phil solving their marital problems, it will be great," Tito quipped.

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Supreme Court divided on Voting Rights Act

(CBS News) WASHINGTON -- The Voting Rights Act has been the law of the land for nearly half a century, helping to ensure that minorities are not denied the right to vote. On Wednesday, Shelby County, Ala., challenged the law at the Supreme Court.

The arguments sharply divided the justices: The court's conservative majority appeared poised to strike down at least part of the act and eliminate the current federal oversight of voting in the South.

At issue is a decades-old provision in the law that requires nine states, mostly in the South, to get approval from the federal government before changing voting laws or procedures.

Justice Antonin Scalia called it a "racial entitlement."

Chief Justice John Roberts asked if the government believed "the citizens in the South are more racist than citizens in the North." Roberts said current data on voter turnout revealed more problems in Massachusetts than in Mississippi.

Congress did not rely on current data when, in 2006, it reauthorized the Voting Rights Act. It continued to rely on rates of minority voter registration and turnout in the elections of 1964, 1968 and 1972.

Will the Voting Rights Act survive the Supreme Court?
Proposed changes to Voting Rights Act stir controversy in Alabama

Alabama attorney Frank Ellis said Congress should look at the modern-day South.

Frank Ellis

/

CBS News

"We ask for some recognition that we and these other converted jurisdictions have made great strides over the last 48 years," Ellis said.

The liberal justices strongly defended the law, saying Congress had thousands of pages of evidence documenting discrimination.

"Discrimination is discrimination, and what Congress said is it continues," Justice Sonia Sotomayor said.

Justice Stephen Breyer said, "The disease is still there ... it's gotten a lot better, a lot better, but it's still there."

Debo Adegbile

/

CBS News

That's why civil rights attorney Debo Adegbile said the provision is as necessary today as a generation ago.

"The problems are much more serious, much more repetitive, there is a much greater continuity in certain places than others," Adegbile said.

The liberal justices -- and the Obama administration -- say the court should defer to Congress, which they say is was better situated to make judgments about discrimination in voting. But based on the arguments today, it does appear a majority of the conservative judges are ready to tell Congress it's going to have to make some changes in that law.

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Holder Says Sequester Makes America Less Safe

The looming budget sequestration will make Americans less safe, Eric Holder says—and anyone who says otherwise isn't telling the truth.

"This is something that is going to have an impact on the safety of this country," the U.S. attorney general told ABC's Pierre Thomas on Wednesday in a wide-ranging, exclusive interview.

"And anybody that says otherwise is either lying or saying something that runs contrary to the facts," Holder said.

In his interview with ABC News, Holder reiterated warnings that if automatic spending cuts are triggered on Friday, the Justice Department will be handicapped in some of its most vital missions to prevent terrorist attacks and crime.

"The Justice Department is going to lose nine percent of its budget between now and September 30th. We're going to lose $1.6 billion. There are not going to be as many FBI agents, ATF agents, DEA agents, prosecutors who are going to be able to do their jobs," Holder said. "They're going to be furloughed. They're going to spend time out of their offices, not doing their jobs."

Portions of the interview will air Wednesday, February 27 on "ABC World News"

Patrick Semansky/AP Photo

Eric Holder Says Homegrown Terror Threat Equals International: Exclusive Watch Video

Eric Holder Remembers Newtown, His Worst Day on the Job: Exclusive Watch Video

President Obama's Cabinet members have been warning for weeks that budget sequestration, which will begin Friday unless Obama and Republicans reach a deficit-reduction deal to avoid it, will leave their agencies shorthanded and could bring about disastrous consequences. Homeland Security Secretary Janet Napolitano and Transportation Secretary Ray LaHood have both appeared at the White House press briefing room to warn that furloughs for border-patrol agents, TSA agents and air-traffic controllers will mean weakened border and port security, longer waits in airport security lines, and logjammed air travel.

Holder, for his part, warned in a Feb. 1 letter to the Senate Appropriations Committee that cuts to the FBI, the ATF, the U.S. Marshals Service, and U.S. Attorneys would limit the department's capacity to investigate crimes. Cuts at the Bureau of Prisons, Holder wrote, would mean lockdowns and potential violence, with fewer staff members on hand. In a separate letter, FBI Director Robert Mueller warned that counterterrorism operations would be affected, with the possible elimination of some joint terrorism task forces with state and local police. Limited surveillance and slower response times would mean unwatched targets and the possibility that individuals on terrorism watch lists could gain entry to the U.S.

"FBI's ability to proactively penetrate and disrupt terrorist plans and groups prior to an attack would be impacted," Mueller wrote.

To Holder, the problem is simple.

"If you don't have prosecutors and agents doing what we expect them to do, and we won't if this thing actually takes place, we are going to be a nation that is going to be less safe. And that is simple fact," Holder said.

Some Republicans have claimed the Obama administration is exaggerating the sequester's purported consequences as a ploy to campaign for tax hikes. On "Fox News Sunday" this week, Sen. Tom Coburn, R-Okla., posited that federal agencies enjoy enough flexibility to avoid the worst consequences of the cuts.

On Wednesday, Holder acknowledged that the Justice Department will do what it can to avoid compromised security, while maintaining that furloughs can't be avoided.

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Iran upbeat on nuclear talks, West still wary

ALMATY (Reuters) - Iran was upbeat on Wednesday after talks with world powers about its nuclear work ended with an agreement to meet again, but Western officials said it had yet to take concrete steps to ease their fears about its atomic ambitions.

Rapid progress was unlikely with Iran's presidential election, due in June, raising domestic political tensions, diplomats and analysts had said ahead of the February 26-27 meeting in the Kazakh city of Almaty, the first in eight months.

The United States, China, France, Russia, Britain and Germany offered modest sanctions relief in return for Iran curbing its most sensitive nuclear work but made clear that they expected no immediate breakthrough.

In an attempt to make their proposals more palatable to Iran, the six powers appeared to have softened previous demands somewhat, for example regarding their requirement that the Islamic state ship out its stockpile of higher-grade uranium.

Iran's chief nuclear negotiator Saeed Jalili said the powers had tried to "get closer to our viewpoint", which he said was positive.

In Paris, U.S. Secretary of State John Kerry commented that the talks had been "useful" and that a serious engagement by Iran could lead to a comprehensive deal in a decade-old dispute that has threatened to trigger a new Middle East war.

Iran's foreign minister said in Vienna he was "very confident" an agreement could be reached and Jalili, the chief negotiator, said he believed the Almaty meeting could be a "turning point".

However, one diplomat said Iranian officials at the negotiations appeared to be suggesting that they were opening new avenues, but it was not clear if this was really the case.

Iran expert Dina Esfandiary of the International Institute for Strategic Studies said: "Everyone is saying Iran was more positive and portrayed the talks as a win."

"I reckon the reason for that is that they are saving face internally while buying time with the West until after the elections," she said.

The two sides agreed to hold expert-level talks in Istanbul on March 18 to discuss the powers' proposals, and return to Almaty for political discussions on April 5-6, when Western diplomats made clear they wanted to see a substantive response from Iran.

"Iran knows what it needs to do, the president has made clear his determination to implement his policy that Iran will not have a nuclear weapon," Kerry said.

A senior U.S. official in Almaty said, "What we care about at the end is concrete results."

ISRAELI WARNING

Israel, assumed to be the Middle East's only nuclear-armed power, was watching the talks closely. It has strongly hinted it might attack Iran if diplomacy and sanctions fail to ensure that it cannot build a nuclear weapon. Iran denies any such aim.

Israeli Prime Minister Benjamin Netanyahu said economic sanctions were failing and urged the international community to threaten Iran with military action.

Western officials said the offer presented by the six powers included an easing of a ban on trade in gold and other precious metals, and a relaxation of an import embargo on Iranian petrochemical products. They gave no further details.

In exchange, a senior U.S. official said, Iran would among other things have to suspend uranium enrichment to a fissile concentration of 20 percent at its Fordow underground facility and "constrain the ability to quickly resume operations there".

The official did not describe what was being asked of Iran as a "shutdown" of the plant as Western diplomats had said in previous meetings with Iran last year.

Iran says it has a sovereign right to enrich uranium for peaceful purposes, and wants to fuel nuclear power plants so that it can export more oil.

But 20-percent purity is far higher than that needed for nuclear power, and rings alarm bells abroad because it is only a short technical step away from weapons-grade uranium. Iran says it produces higher-grade uranium to fuel a research reactor.

Iran's growing stockpile of 20-percent-enriched uranium is already more than half-way to a "red line" that Israel has made clear it would consider sufficient for a bomb.

In Vienna on Wednesday, a senior U.N. nuclear agency official told diplomats in a closed-door briefing that Iran was technically ready to sharply increase this higher-grade enrichment, two Western diplomats said.

"Iran can triple 20 percent production in the blink of an eye," one of the diplomats said.

The U.S. official in Almaty said the powers' latest proposal would "significantly restrict the accumulation of near-20-percent enriched uranium in Iran, while enabling the Iranians to produce sufficient fuel" for their Tehran medical reactor.

This appeared to be a softening of a previous demand that Iran ship out its stockpile of higher-grade enriched uranium, which it says it needs to produce medical isotopes.

Iran has often indicated that 20-percent enrichment could be up for negotiation if it received the fuel from abroad instead.

Jalili suggested Iran could discuss the issue, although he appeared to rule out shutting down Fordow. He said the powers had not made that specific demand.

The Iranian rial, which has lost more than half its foreign exchange value in the last year as sanctions bite, rose some 2 percent on Wednesday, currency tracking websites reported.

(Additional reporting by Fredrik Dahl and Yeganeh Torbati in Almaty, Georgina Prodhan in Vienna, Zahra Hosseinian in Zurich, Gabriela Baczynska in Moscow, Dan Williams in Jerusalem and Marcus George in Dubai; Writing by Timothy Heritage and Fredrik Dahl; Editing by Louise Ireland)

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Japan's factory output up 1.0% in January

TOKYO: Japan's factory output for January rose a smaller-than-expected 1.0 per cent from the previous month, official data showed on Thursday.

The rise was weaker than a 1.5 per cent expansion expected by the market and a revised 2.4 per cent increase in December.

But the ministry maintained a positive view, saying in a monthly report: "Industrial production has bottomed out and shows some signs of picking up."

- AFP/ck

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Yelp: We compete with print -- not Google or Facebook

Google, who? Facebook, huh? Yea, that's right. The Internet behemoths don't pose any threat to business reviews site Yelp and its still-blossoming local advertising business. Well, that's Yelp's attitude anyhow.

"Today, we're really competing with print, radio, and television," Geoff Donaker, Yelp's chief operating officer, said Tuesday when speaking at the Morgan Stanley Technology, Media, and Telecom conference.

But what about Internet businesses like Google and Facebook? Donaker is sure the pair will compete with Yelp in the local advertising arena eventually -- emphasis on eventually. Yelp will let that battle "play out in a decade or so," he said.

Donaker's stance hinges around this point: A tiny fraction of the 50 million local businesses in the Western world are spending on online advertising. They pay to advertise, he said, but primarily through more traditional mediums such as the Yellow Pages and ValPak.

Yelp counts close to 1 million business accounts, and 40,000 of them purchase ads to get their venues featured in front of consumers searching for dentists, doctors, plumbers, and so forth. Chief Financial Officer Rob Krolik said, however, that Yelp is uniquely positioned to attract tens of millions of local merchant customers. Currently, the conversations the company has with would-be advertising business owners are not about Google at all, he said, but instead about how much they're spending on ValPak coupons.

The we-don't-fear-Google assertions are a bit odd considering Chief Executive Jeremy Stoppleman's well-documented dislike for the search giant, a company he has described as evil. Nor do they match up with Wall Street's beliefs. Investors punished Yelp as soon as Facebook announced Graph Search, a social-network search engine that, in helping people find nearby businesses on Facebook, could eat into Yelp's chunk of the local advertising pie.

But ask Yelp about Graph Search and you'll likely hear a giant yawn, and a small dig.

It's no big surprise that Facebook has gone this route, Donaker said, indicating that Yelp is taking a wait-and-see approach to Facebook's search product. He couldn't help but add that, as it stands, Yelp doesn't receive any "material level of traffic" from the social network.

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Debate over Voting Rights Act changes in Ala.

(CBS News) -- On Wednesday, the Supreme Court will hear a challenge to the landmark Voting Rights Act of 1965. Both sides agree the south have changed in the past half-century. At issue is, has it changed enough?

In Shelby County, Alabama, the question is whether the state's racist past must forever define it.

(Watch: Voting Rights Act challengers take aim at "Section 5", below)

Fifty years ago, Alabama was the cradle of the civil rights movement, where protestors endured fire hoses, arrests and bombings in the fight for equality. One result was the Voting Rights Act.

One provision of the Act, Section 5, still requires all or part of 16 states, mostly in the south, to get approval from the Justice Department before changing voting procedures or electoral maps.

"Section five, which is what we are attacking, was never intended by congress to be permanent," said Frank Ellis, a Shelby County lawyer who is at the center of the battle to eliminate Section 5, and force the federal government to treat Alabama and other covered states like the rest of the country.

"They are still using the same criteria to determine whether these 16 states that are covered, they are still using the same test that they used in 1965," Ellis said.

"Things have changed in the South," he said. "This is a dynamic society."

But Ernest Montgomery says things have not changed enough. He was on the city council in Calera, Alabama when city officials, facing a population boom, redrew his district map. He lost the election to a white candidate. Under Section 5, the Justice Department ordered a new election and Montgomery won.

The minority representation in his district under the old map was about 67% African American, according to Montgomery. With the new map, that number dropped to about 28%.

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Voting Rights Act Section 5 "not the only tool" to protect voting rights, Obama says

VIDEO: SCOTUS to hear challenge to Voting Rights Act

Shelby County Pastor Harry Jones calls it discrimination.

"I think it was designed to dilute the power of the minority community," Jones said. "It did just that."

Opponents like Ellis say they are not attacking the entire Voting Rights Act. If there's intentional discrimination, people can sue, just like they do in Michigan, Ohio and other states that aren't by Section Five.

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Arias Liked Some Kinky Sex, She Admits

Though accused murderer Jodi Arias said she sometimes felt "like a prostitute" at the hands of her ex-boyfriend, Travis Alexander, she admitted today that she often enjoyed their sex life and even suggested sex acts they could try.

Prosecutor Juan Martinez, after a day of aggressive questioning and bickering with Arias, asked her about her own suggestions for her sex life with Alexander, including a phone conversation in which she suggested using sexual lubricant.

Arias, 32, is accused of killing Alexander, but claims it was in self-defense.
Timeline of the Jodi Arias Trial

"You introduced KY Jelly into the relationship to make it more sexually enjoyable, right? When we're talking about the level of experimentation, it looks like both of you were experimenting together sexually. So when we hear things like, 'I felt like a prostitute,' that's not exactly true, is it?" Martinez said.

"It was often mutual," Arias said. "I didn't feel like a prostitute during, just after."

Jodi Arias Testimony: Prosecution's Cross-Examination Watch Video

Jodi Arias Remains Calm Under Cross-Examination Watch Video

Martinez showed the jury a text message Arias sent offering to perform oral sex on Alexander, comparing it to a statement she made on direct testimony saying that she once felt like a prostitute when Alexander tossed a piece of chocolate at her and walked away without a word after she performed oral sex.

"How is it you can say you 'felt like a prostitute' when you're moving the relationship ahead like this?" Martinez asked. "The act itself is the same thing, and here you're requesting it. The geography is different, but that aside, isn't it the same act? And you're requesting it?"

"When he (ejaculated) and left afterward I felt like a prostitute. When we mutually went through things together I didn't," she said.

Arias also admitted that she sent Alexander a topless photo of herself after he sent her photos of his penis, and that she only did it after she had her breasts enhanced surgically.

Catching Up on the Trial? Check Out ABC News' Jodi Arias Trial Coverage

The testimony came as Martinez continued his efforts to discredit Arias' testimony on the stand, including her statements that she often succumbed to Alexander's sexual fantasies so she wouldn't hurt his feelings. Martinez has focused on portraying Arias as a liar for much of his direct examination.

Arias is charged with murder for killing her ex-boyfriend Travis Alexander at his home in Mesa, Ariz., in June 2008. She claims she killed him in self defense and that he had been increasingly violent and sexually demanding in the months before the confrontation. She also claimed he was interested in young boys.

The prosecution claims she killed him in a jealous rage. She could face the death penalty if convicted of first degree murder.

Jodi Arias Trial See Tempers Flare

Earlier in the day,tempers flared between Arias and prosecutor Martinez as the prosecutor tried to detail Arias' history of spying on her boyfriends, but Arias complained that his aggressive style of questioning made her "brain scramble."

Arias and Martinez, who have sparred throughout two prior days of cross-examination, spent more than 10 minutes bickering over Martinez's word choices and his apparent "anger."

The morning's testimony, and Martinez's points about Arias' alleged spying, were largely interrupted by the spats.

"Are you having trouble understanding me?" Martinez yelled.

"Yes because sometimes cause you go in circles," Arias answered.

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Italy parties seek way out of election stalemate

ROME (Reuters) - Italy's stunned political parties searched for a way forward on Tuesday after an inconclusive election gave none of them a parliamentary majority and threatened prolonged instability and a renewal of the European financial crisis.

The results, notably the dramatic surge of the anti-establishment 5-Star Movement of comic Beppe Grillo, left the center-left bloc with a majority in the lower house but without the numbers to control the upper chamber, the Senate.

Financial markets fell sharply at the prospect of a stalemate that reawakened memories of the crisis that pushed Italy's borrowing costs toward unsustainably high levels and brought the euro zone to the brink of collapse in 2011.

"The winner is: Ingovernability," ran the headline in Rome newspaper Il Messaggero, reflecting the deadlock the country will have to confront in the next few weeks as sworn enemies are forced to work together to form a government.

Ratings agency Standard & Poor's said on Tuesday that policy choices of the next Italian government would be crucial for the country's creditworthiness, underlining the need for a coalition that can agree on new reforms.

Pier Luigi Bersani, head of the center-left Democratic Party (PD), has the difficult task of trying to agree a "grand coalition" with former prime minister Silvio Berlusconi, the man he blames for ruining Italy, or striking a deal with Grillo, a completely unknown quantity in conventional politics.

The alternative is new elections either immediately or within a few months, although both Berlusconi and Bersani have indicated that they want to avoid a return to the polls if possible: "Italy cannot be ungoverned and we have to reflect," Berlusconi said in an interview on his own television station.

For his part, Grillo, whose movement won the most votes of any single party, has indicated that he believes the next government will last no more than six months.

"They won't be able to govern," he told reporters on Tuesday. "Whether I'm there or not, they won't be able govern."

He said he would work with anyone who supported his policy proposals, which range from anti-corruption measures to green-tinted energy measures but rejected suggestions of entering a formal coalition: "It's not time to talk of alliances... the system has already fallen," he said.

The election, a massive rejection of the austerity policies applied by Prime Minister Mario Monti with the backing of international leaders from U.S. President Barack Obama to German Chancellor Angela Merkel, caused consternation across Europe.

German Finance Minister Wolfgang Schaeuble put a brave face on it, saying "that's democracy".

Spanish Foreign Minister Jose Manuel Garcia-Margallo was more pessimistic.

"This is a jump to nowhere that does not bode well either for Italy or Europe," he said.

A long recession and growing disillusionment with mainstream parties and tax-raising austerity fed a bitter public mood and contributed to the massive rejection of Monti, whose centrist coalition was relegated to the sidelines.

Projections by the Italian center for Electoral Studies showed that the center-left will have 121 seats in the Senate, against 117 for the center-right alliance of Berlusconi's PDL and the regionalist Northern League. Grillo would take 54.

That leaves no party with the majority in a chamber which a government must control to pass legislation.

"THE BELL IS RINGING"

On a visit to Germany, President Giorgio Napolitano said he would not comment until the parties had consulted with each other and Bersani called on Berlusconi and Grillo to "assume their responsibilities" to ensure Italy could have a government.

He warned that the election showed austerity policies alone were no answer to the economic crisis and said the result carried implications beyond Italy.

"The bell is ringing for Europe as well," he said in his first public comments since the election.

He said he would present a limited number of reform proposals to parliament, focusing on jobs, institutional reform and European policy.

However forming an alliance may be long and difficult and could test the sometimes fragile internal unity of the mainstream parties.

"The idea of a majority without Grillo is unthinkable. I don't know if anyone in the PD is considering it but I'm against it," said Matteo Orfini, a member of Bersani's PD secretariat.

"The idea of a PD-PDL government, even if it's backed by Monti, doesn't make any sense," he said.

For his part, Berlusconi won a boost when his Northern League ally Roberto Maroni won the election to become regional president of Lombardy, Italy's economic heartland and one of the richest and most productive areas of Europe.

For Italian business, with an illustrious history of export success, the election result brought dismay that there would be no quick change to what they see as a regulatory sclerosis that has kept the economy virtually stagnant for a decade.

"This is probably the worst possible scenario," said Francesco Divella, whose family began selling pasta under its eponymous brand in 1890 in the southern region of Puglia.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

But even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy that has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, who is currently on trial for having sex with an under-age prostitute.

However, Monti struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth. A weak center-left government may not find it any easier.

The view from some voters, weary of the mainstream parties, was unrepentant: "It's good," said Roger Manica, 28, a security guard in Rome, who voted for the center-left PD.

"Next time I'll vote 5-Star. I like that they are changing things, even if it means uncertainty. Uncertainty doesn't matter to me, for me what's important is a good person who gets things done," he said. "Look how well they've done."

(Additional reporting by Barry Moody, Gavin Jones, Lisa Jucca, Steven Jewkes, Steve Scherer, Catherine Hornby and Massimiliano Di Giorgio, Annika Breidthardt in Berlin. Writing by Philip Pullella and James Mackenzie; Editing by Peter Graff)

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