* Lawmakers reject amendments on gender equality
* Approval of new electoral law expected in lower house
* New law won't affect Senate, leaving key problem unresolved
By Roberto Landucci
ROME, March 10 (Reuters) - Italian lawmakers rejected a bid on Monday to set minimum quotas for women in parliament under a new electoral law but are expected to pass the package as a whole, advancing Prime Minister Matteo Renzi's quest for wider economic reforms.
Reforming the system blamed for leaving Italy with a deadlocked parliament has been a top priority for Renzi since he took over leadership of the main centre-left Democratic Party (PD) last year.
It is seen as a big test of the 39-year-old prime minister's ability to pass the kind of broad structural reforms considered necessary to revive Italy's stricken economy and repair its sagging public finances.
Renzi defied party critics to reach broad agreement on a new law with veteran centre-right leader Silvio Berlusconi but final approval has been delayed by wrangling in parliament, as well as the upheaval in which he ousted his predecessor Enrico Letta as prime minister last month.
Renzi, who leads a cross-party coalition made up of the PD and smaller centre-right and centrist parties, aims to unveil a major package of tax and labour reforms on Wednesday and wants the electoral law passed in the lower house before then.
The lower house is expected to vote on the package on Tuesday and it will then go to the Senate where it could undergo further amendments.
The new law, intended to foster stable governments, sets a minimum vote threshold of 4.5 percent for a party to enter parliament as part of a coalition. It also allows for a run-off vote to decide the winner if no side wins a majority in the first round of voting.
However it will only apply to the lower house and does not affect the Senate, leaving one of the most formidable hurdles to stable government untouched.
The Senate currently has virtually exactly equal powers to the lower house but is elected on separate regional lines rather than by a single national electorate, making it difficult to form stable parliamentary majorities.
Renzi intends to reduce the Senate to the status of a regional assembly without the power to pass or block legislation or vote no confidence against a government. But that will require a change to the constitution, a complicated procedure which could take a year or more to complete.
Amendments which would have made it compulsory for parties to propose equal numbers of men and women on their voting lists were blocked late on Monday, drawing angry comment from some lawmakers.
"It is a wound which removes any credibility from the proposed electoral law," Barbara Pollastrini, a former centre-left minister for equal opportunities, said in a statement.
However, Renzi said he would allow a free vote on the measures, meaning final approval should not be held up. In a statement on his Facebook page, he pledged that the PD would ensure parity between male and female candidates. (Reporting by James Mackenzie; Editing by Mark Heinrich)
Our Standards: The Thomson Reuters Trust Principles.
