By Gavin Jones
ROME (Reuters) - The Italian government won a confidence vote in the Senate on Wednesday on a fiercely contested reform of the justice system aimed at preventing thousands of cases being wiped out by the statute of limitations before a verdict is reached.
The bill has made slow progress through parliament since it was presented by former Prime Minister Matteo Renzi more than two years ago and it will now have to return to the lower house for another reading before it can become law.
It was approved in the Senate by 156 votes to 121 in a confidence motion which would have forced Prime Minister Paolo Gentiloni to resign if he had lost.
The reform toughens sanctions for theft and burglary and limits publication of wiretaps in criminal investigations, but the most contentious aspect involves the statute of limitations, which imposes deadlines on courts to complete legal proceedings.
Partly due to the notorious slowness of Italy's justice system, prosecutors say it is all but impossible to reach a definitive verdict for most financial crimes within the prescribed time frame, which is seldom more than eight years.
Uniquely among advanced countries, Italy's statute of limitations starts from the moment an alleged crime is committed rather than from the point it is discovered, and the time limit is not extended when a defendant is indicted or sentenced. No other country has both rules.
This is a major reason why, according to data issued by the Council of Europe, just 1 percent of inmates in Italian prisons are there for white collar crimes. That is one of the lowest rates in Europe and compares with 12 percent in Germany.
Under the proposed reform, the statute of limitations would be suspended for 18 months between an initial conviction and the start of a first appeal, and suspended for another 18 months after a second conviction before a second appeal begins.
In Italy defendants are allowed two appeals and are considered innocent until the final court ruling is delivered.
The reform is considered inadequate by many prosecutors, who say the time limit should be scrapped as soon as police open investigations into a suspect, as happens in Britain, or when a suspect is sent to trial, as in the United States.
On the other hand, small center-right parties in the ruling coalition oppose any curbs on the statute of limitations.
Politicians from these parties have held up and watered down the reform, and they said they would demand fresh changes when it is discussed again in the Chamber of Deputies.
(Editing by Alison Williams)