Analysis-What's next for Italy's coalition after Berlusconi's death?

By Angelo Amante and Giuseppe Fonte

ROME (Reuters) - The death of Silvio Berlusconi will send shockwaves through his Forza Italia party, a member of Italy's right-wing coalition, but analysts believe it could provide a chance for Prime Minister Giorgia Meloni to strengthen her leadership.

Media tycoon Berlusconi founded Forza Italia when he entered politics in 1994. The party always relied on his charismatic leadership, and saw its support dwindle in recent years as health issues limited his political commitment.

Forza Italia is currently the junior partner among the three main parties in the coalition and is seen as a more moderate force compared to Matteo Salvini's League and Meloni's Brothers of Italy.

The support of Forza Italia's 62 lawmakers between the upper and lower house of parliament is crucial for Meloni to maintain a solid majority, but there is scepticism that the party can find a leader able to avoid a break up.

"Forza Italia may die with Berlusconi, it is difficult to replace him, this is a monarchy that ends with the king," Giuliano Cazzola, a former lawmaker who was elected in parliament with Berlusconi, told Reuters.

Analysts believe Forza Italia members will increasingly be tempted to shift allegiance to other parties without Berlusconi keeping them afloat, giving Meloni leeway to snap up lawmakers and broaden her party's ranks.

"I expect Brothers of Italy to be attractive to Forza Italia members," Lorenzo De Sio, a politics professor at LUISS University in Rome, said.

The relationship between Berlusconi and Meloni repeatedly came under strain since they won general elections together last year. They clashed over the war in Ukraine and he was spotted describing her as overbearing, arrogant and offensive.

But the way Berlusconi shaped the rightist bloc in the last decades paved the way for Meloni's climb to power.

The heirs of the post-fascist Italian Social Movement (MSI) - which Meloni had joined in her youth - joined Berlusconi's coalition in the mid-1990s, taking cabinet posts for the first time.

That triggered a long process which ended up in a merger between Forza Italia and MSI's heir Alleanza Nazionale in a single party. Meloni eventually left it in 2012 to co-found Brothers of Italy.

'GOOD GAME'

Brothers of Italy presents itself as conservative, but often draws criticism for maintaining the old flame symbol of the original MSI and media occasionally publish photographs showing fascist memorabilia in the offices of some regional politicians.

Eugenio Pizzimenti, a politics professor at Pisa University, said Berlusconi's death could lay the ground for Meloni to give up for good her party's post-fascist roots and usher in a new political force.

"They would also need a 'makeup' at the international level to show they are ready to become a full conservative party. If Meloni plays it that way, she has a good game," he told Reuters.

Antonio Tajani, the foreign minister and deputy prime minister, is Forza Italia's most senior figure within the government but analysts and politicians doubt he would be able to take over as leader.

He is widely seen as a reliable figure and has strong European Union credentials following a long career in Brussels, but Pizzimenti believes he could only help Forza Italia's transition to a new Meloni-led conservative party.

Investors are optimistic about Meloni's prospects. Althea Spinozzi, fixed income strategist at Saxo Bank, said the risk associated with investing in Italy can decrease with a downsized Forza Italia.

However, analysts do not rule out a political successor to Berlusconi may eventually still emerge from his family, complicating Meloni's efforts to cement her leadership.

His eldest child, Marina, who has chaired Berlusconi's holding Fininvest since 2005 and is aged 56, would be the frontrunner to take on the reins of the party in case the family decides to remain active in politics.

Analyst De Sio said Marina Berlusconi could take the field to preserve the family's influence in the Italian politics.

"She would be in competition with Meloni. The key issue is the family's desire to protect its companies, which are exposed without Berlusconi," he told Reuters.

(Reporting by Angelo Amante and Giuseppe Fonte; additional reporting by Antonella Cinelli; Editing by Angus MacSwan)