Italians Gather to Protest Corruption : Politics: Rallies condemn attempt to shield former prime minister from charges. But government shows signs of surviving the crisis.

Thousands of angry demonstrators packed historic squares in Rome and Milan on Friday night to protest political corruption, but signs were growing that the new government would survive Italy’s latest crisis.

Sporadic demonstrations went on all day throughout the country and financial markets panicked after Parliament on Thursday night refused to allow former Prime Minister Bettino Craxi to stand trial on serious corruption charges.

The decision prompted four ministers to resign, three of them from the ex-Communist Democratic Party of the Left (PDS).

More than 5,000 people attended a nighttime protest rally in Rome’s Piazza Navona where PDS leader Achille Occhetto condemned the attempt to shield Craxi.

“This just widens the gap between Parliament and the people,” he said, while a small group of protesters shouted abuse outside Craxi’s hotel nearby.

“Shame! Kill yourself!” they shouted, until Craxi was whisked away in a hail of missiles and catcalls as police reinforcements moved in.

Thousands of protesters crammed into Milan’s Piazza del Duomo and a smaller but lively demonstration was held in Naples.

Occhetto, however, held out an olive branch to new Prime Minister Carlo Azeglio Ciampi, hinting the three PDS ministers might be persuaded to reconsider.

“There is only one way to respond--keep the government on its feet just to pass electoral reform laws and then quickly go to the polls,” he said.

The party backs proposals endorsed by a referendum this month to scrap the proportional representation voting system many blame for encouraging corruption.

Occhetto said he had put the PDS demands to Ciampi at a meeting earlier on Friday and added, “It seems we were heard.”

The Cabinet office issued a statement earlier saying the Craxi affair made it essential to change the voting system quickly, and political sources said Ciampi also planned to scrap parliamentary immunity from prosecution.

About 2,600 politicians and business leaders have been arrested over the last 15 months as magistrates revealed how political parties routinely demanded huge bribes in return for public works contracts.

Mauro Bertini, the last of four top Fiat executives wanted in connection with the nationwide corruption scandal, surrendered Friday.

Craxi is accused of taking as much as $29 million in bribes but had defended himself in Parliament by saying it was standard practice for political parties to extract the sums of money.

After hearing Craxi’s counsel warn them of a witch hunt and tell them, “Tomorrow it will be your turn,” the members of the Chamber of Deputies (lower house) voted narrowly to allow the former Socialist leader to keep his parliamentary immunity on all but a few minor charges.

After a day of feverish consultations with party chiefs and President Oscar Luigi Scalfaro, Ciampi appeared to be back on course for his appointment in Parliament next Thursday to unveil the government’s program, political sources said.

Financial markets that took heart at the appointment of Ciampi, the 72-year-old governor of the Bank of Italy, had nose-dived at the prospect of chaos on Friday.

At one point the Milan bourse’s MIB index was down a hefty 4%, while the lira had tumbled to 956 to the German mark from 932 at the close of trade in Europe Thursday.

But signs the government might survive boosted sentiment and the stock market finally closed 2.4% down, with the lira ending back up around 940.