UPDATE 2-Italy aims for high speed rail decision by May, no coalition split -minister

Italy aims to decide by the end of May whether to complete a high-speed rail link to France, Transport Minister Danilo Toninelli told Reuters, predicting agreement within the government on a plan that has divided its coalition parties.

Italy's anti-establishment 5-Star Movement has long opposed the plan for a high-speed train between Turin and Lyon as a waste of money, while its coalition partner, the far right League, strongly supports it as an urgently needed investment.

The issue has the potential to split apart the eight-month-old coalition, which is beset by difficulties as the economy approaches what could be its third recession in a decade.

In written responses to questions from Reuters, Toninelli, a prominent 5-Star member, said he would not consider a decision to press ahead with the railway as a political setback, since it would mean the project had survived his own scrutiny.

"If we go ahead it means that it is worth doing it. I will have, myself, checked that people's money is not going to be wasted and therefore I will have done my best," he said.

Work has already started on the 270-km (167-mile) high-speed line which is estimated to cost some 26 billion euros ($29.8 billion) and tap French and European Union funds.

The railway, known as TAV, is one of Europe's largest infrastructure projects. Rome called for work to be frozen last year to enable an extensive review of its financial viability. League politicians joined at a mass rally in Turin on Saturday to demand that work resume.

In an attempt to settle the dispute, Toninelli has charged a commission to carry out a cost-benefit analysis, with another group of lawyers examining the legal implications for Italy in case of a withdrawal.

"We are working on this issue with the aim of making a decision before the EU elections (of May 26) after a debate within the government and with France," Toninelli said. "Paris's view, and the approval of the EU, will obviously be taken into very high consideration".

The 5-Star says the railway is too expensive and would harm the environment in the northwest alpine Susa valley. The League, whose strongholds are in the industrialised north, says it would boost trade and cut carbon emissions from road transport.

The European Commission said in November delays in its completion could lead to a cut in EU funds.

Toninelli also said the government was fully committed to scrapping the concessions of highway operator Autostrade per l'Italia, controlled by Benetton family infrastructure group Atlantia and blamed for the collapse of a bridge in Genoa last August that caused the deaths of 43 people.

Italian newspapers have reported that the League could seek a government reshuffle if, as polls now predict, it outperforms 5-Star at the EU election in May. Toninelli said 5-Star's cabinet roles were in no danger.

"It is solid as much as my determination to serve the people's interests," he said. ($1 = 0.8732 euros) (Reporting by Stefano Bernabei, writing by Giselda Vagnoni Editing by Steve Scherer and Peter Graff)

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