Markets Dive Amid Italian Election Stalemate

World markets have been rocked after elections in Italy seen as crucial for the eurozone ended in deadlock.

No group emerged as a clear winner after the vote, which saw a populist anti-austerity party make a stunning debut.

The Italian stock market in Milan fell 5% on opening and state borrowing costs rose as investors took fright at the political stalemate.

By late trading on Tuesday Milan's MIB was 4.53% down, Spain's Ibex had slid 2.9%, the Cac in Paris was down 2.4%, Frankfurt's Dax 1.97% off and the FTSE in London 1.24% lower.

Comic Beppe Grillo's protest party appears the real winner

Banking stocks were particularly badly hit, although some of the damage was erased after the initial plunge in prices and the extent of the declines eased across the day.

The euro also fell to an almost seven-week low against the dollar in Asia on fears about the eurozone debt crisis, down as far as $1.3042, its lowest since January 10.

While other European stock markets, including the FTSE 100 in London, saw falls greater than 1% the Dow Jones opened positively on Wall Street following a 1.6% loss on Monday.

Pier Luigi Bersani's centre-left bloc has a majority in the lower chamber

The market reaction reflects concerns that the election result could spark a new crisis in Italy, which has the eurozone's third largest economy.

There are fears it will jeopardise tough reforms required to heal its economic woes and prevent a new round of global financial turmoil.

The centre-left block of Pier Luigi Bersani will have a majority in the lower house thanks to a premium of seats given to the largest block in the chamber.

In the upper house, the Senate, seats are awarded on a region-by-region basis. Here, the centre-left looks set to end up with around 119, compared to 117 for the centre-right but 158 are needed for a majority to govern.

Any coalition government that may be formed must have a working majority in both houses to pass legislation, which means Italy is now in a state of limbo with a hung parliament that is unprecedented in its post-war history.

"It is clear to everyone that this is a very delicate situation for the country," Mr Luigi Bersani said.

Former prime minister Silvio Berlusconi has already indicated his centre-right could be open to a grand coalition with the centre-left under Mr Bersani but he wants a recount for the Senate vote.

"Italy cannot be left ungoverned, we have to reflect," he said, describing the market reaction as "a bity crazy" and saying all sides had to "sacrifice something" if the impasse was to be broken.

An ally of conservative German Chancellor Angela Merkel urged Italy to stick with reforms pursued by the outgoing technocratic emergency government of Mario Monti.

Silvio Berlusconi did better in the Senate

But the poor showing by Mr Monti's centrist bloc, which took just 10.6%, showed a weariness with austerity that was exploited by both Mr Berlusconi and comic Beppe Grillo.

The latter's anti-establishment 5-Star Movement won more votes than any other party, taking 25% nationally.

In just three years, the 5-Star Movement - heavily backed by a frustrated generation of young Italians increasingly shut out from permanent full-time jobs - has grown from a marginal group to one of the most talked about political forces in Europe.

Comparing single parties without coalitions, it is now the biggest party in the lower house with 25.55% to the Democratic Party's 25.41% - a shock success that analysts predicted would reverberate around an austerity-weary Europe.

"The 'non-party' has become the largest party in the country," said Massimo Giannini, commentator for the Rome newspaper La Repubblica about Grillo, who mixes fierce attacks on corruption with policies ranging from clean energy to free Internet.

"This is fantastic! We will be an extraordinary force!" Mr Grillo said on his website, warning mainstream politicians they would "only last a few more months".

"We'll have 110 people in parliament and we'll be millions outside."

Mr Monti said: "It's not that surprising if you consider how much people were let down by politics in its traditional forms."

Some Democratic Party officials suggested fresh elections may have to be held within a few months after a reform of Italy's complex electoral laws. Others said some form of agreement could be found with the anti-austerity 5-Star Movement.

Political analysts suggested a possible return to the grand coalition agreement between right and left seen over the past 18 months, or even dissolving the Senate alone to hold fresh elections for only one chamber of parliament.

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Tamara Ecclestone's Ex Jailed Over Plot

The former boyfriend of socialite and model Tamara Ecclestone has been jailed for four years after trying to blackmail her in a £200,000 plot.

Derek Rose, who dated the daughter of Formula One supremo Bernie Ecclestone in 2002, had threatened to reveal intimate details about their relationship.

An email sent to Ms Ecclestone's manager in November 2011 suggested the 33-year-old had been offered £200,000 to sell his story to the press.

It talked about the possibility of a "non-release fee" and a confidentiality contract - but no newspaper had actually made an offer.

Judge Andrew Goymer, at Southwark Crown Court, said: "It was nothing more than a cynical and greedy attempt to extract a large sum of money.

"No doubt you thought that £200,000, which is a large sum to most people, would be small change to somebody with the amount of money that she and her family are reputed to have.

"You also thought that for this reason they would readily part with it to buy your silence. She did not do this."

Rose, from Camden, north London, dated Ms Ecclestone when she was 17 before changing his name by deed poll from Jonathan Ketterman.

The email in 2011 was sent after the socialite had starred in Billion Dollar Girl, a reality TV show exploring her life as an heiress, and after she had featured in charity campaigns.

Southwark Crown Court heard the message had "pernicious" implications and was sent to elicit money from Ms Ecclestone, 28.

It claimed Rose had been asked by television shows, radio programmes and a major tabloid to talk about their relationship.

The judge said Rose's relationship with Ms Ecclestone had ended acrimoniously and left him feeling "extremely hurt".

The court heard during the trial how he sold a story about his ex to the Daily Mail for £10,000 in the year of the break-up.

But the former couple had not been in contact for almost a decade before the blackmail attempt.

Ms Ecclestone lawyer Charlotte Harris said: "Tamara Ecclestone is relieved that Judge Goymer has acknowledged, in his sentencing of Derek Rose, the serious nature of blackmail and the need to deter others from attempting to commit similar offences.

"Ms Ecclestone was content to waive her anonymity in giving evidence because she strongly believes that all people have a right to be protected from such cynical and vicious behaviour. The sentence of four years is welcomed."

The jury failed to reach a verdict on Rose's co-accused Jakir Uddin, 20, of Old Walsall Road, Birmingham, and the prosecution is considering whether to seek a retrial.

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Tom Maynard: Dead Cricketer Was On Drugs

By Jason Farrell, Sky News Correspondent

A promising young cricketer was high on a cocktail of drink and drugs before he was hit by a train and died, an inquest has heard.

Tom Maynard, 23, had taken cocaine, ecstasy and was almost four times over the drink drive limit, Westminster Coroner's Court was told.

The player died last June when he stepped on a live rail and was electrocuted before he was struck by a London Underground train.

He had earlier been stopped by police after he was spotted driving erratically but fled the scene, leaving his keys in the ignition of his Mercedes.

A post-mortem found he had been drinking and taken cocaine and ecstasy in the form of MDMA after a night out with his flatmates.

Mr Maynard had been drinking in Wandsworth, two miles from Wimbledon Park

Mr Maynard was the son of former England and Glamorgan batsman Matthew Maynard and had been tipped as a future England star.

Westminster Coroner's Court heard that tests indicated the cricketer may have been a regular drug user up to three and a half months before his death.

Dr Rosa Cordero said the results showed between 8.7 and 10 nanograms per milligram, which matched some daily users of the drug.

Toxicologist Fiona Perry added that the drugs would cause "significant impairment in coordination and judgement".

Mr Maynard's family have insisted the findings should not define the sportsman, who they described as a "very special person".

The player's girlfriend Carly Baker, a model, wept during the hearing as his last movements were recounted.

Mr Maynard had been on his way to see her on June 18 after going out drinking with friends in Wandsworth, south London, when he died.

Miss Baker said in a statement read in the court that he had phoned her at about 3.30am sounding "very down and depressed".

"For me to say 'what's wrong' is quite unusual," she said. "It was like he needed me. He said 'you're the only thing that makes me happy' and he said it three times."

She added: "I tried to persuade him not to come because I was so worried that he was getting into the car after drinking."

Tom Maynard's black Mercedes C250 is taken away

Police in an unmarked car then spotted his black Mercedes in Wimbledon at around 4.15am and pulled him over.

The sportsman ran off and was eventually discovered at 5.10am half a mile away on a London Underground line.

The court heard he had appeared to already be unconcious on the track when he was hit by a train. The train driver said Mr Maynard lay "perfectly still" and had not moved or flinched as he attempted to brake.

Forensic pathologist Simon Poole said the cricketer's injuries included "burns consistent with contact to a live train rail".

Mr Maynard's father Matthew described his son as a "consummate professional" who "did not suffer from depression".

In a statement issued through the Professional Cricketers' Association, his family said: "The results of the inquest do not define our son. The fact that so very many people thought the world of him is what defines him as a person.

"The only people who would judge Tom on the findings of the inquest are people who didn't know him.

"He made choices that night that tragically cost him his life but his devastated family and friends will love and miss him unconditionally, always. He was a very special person and his death leaves a huge hole in all our lives."

Born in Cardiff, Mr Maynard came through the ranks at Glamorgan Cricket Club before moving to Surrey. He had played a match for the club just 14 hours before he died.

He also earned himself a place on the England Lions tour to Bangladesh and Sri Lanka at the start of last year.

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Police Allowed 'Rapist' To Go Free And Kill

By Martin Brunt, Crime Correspondent

A maverick Scotland Yard rape squad allowed a rape suspect to go unquestioned and free to later kill his two children, it has emerged.

A woman who alleged Jean Say, 62, had raped her was persuaded to retract her complaint by untrained officers under pressure to hit crime targets, said the Independent Police Complaints Commission watchdog.

Say later slashed the throats of his two children, aged 10 and eight, when they went to stay with him for a weekend two years ago.

He was jailed at the Old Bailey for a minimum of 30 years.

The IPCC report has condemned the squad, a specialist Sapphire unit investigating rape and serious sexual crimes in Southwark, South London.

The rape allegation against Say was dismissed by a detective sergeant in the Sapphire unit who said the circumstances did not constitute rape because the woman "consented".

The IPCC said: "The findings of our investigation into the rape ... were also deeply disturbing. The victim was failed by the people from whom she sought help."

Alleged rapist Jean Say later killed his two children

It added: "There is no doubt from the evidence that the woman made an allegation of rape at Walworth police station which should have been believed and thoroughly investigated."

Deputy chairwoman of the IPCC Deborah Glass said: "There's no doubt this was an incredibly serious, shocking incident. We know with all the cases that we've dealt with that the consequences of not dealing with allegations of rape can be extremely serious. This is yet another tragic illustration of that."

It has also emerged that three senior officers recommended by the IPCC for gross misconduct disciplinary hearings around failures in another case escaped serious sanctions. Two were promoted.

The IPCC has investigated the Met's sexual crime squads nine times in recent years, five probes involved the Southwark squad. Nineteen officers have been disciplined, three dismissed and one was jailed.

Ms Glass added: "Given the number of cases where the (Metropolitan Police Service's) response to victims has failed, either through individual officers' criminality or neglect or more systematic problems of training, priorities and resources, the response that 'lessons have been learned' begins to ring hollow."

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Litvinenko Killing: 'UK Tries To Block Truth'

By Mark White, Home Affairs Correspondent

Lawyers for the family of murdered former spy Alexander Litvenenko have accused the British Government of trying to block the truth over the killing in order to protect trade with Russia.

Ben Emmerson QC, representing Mr Litvinenko's widow Marina, warned the coroner he should not allow the inquest into the death to be "bogged down" by the "Government's attempt to keep a lid on the truth".

Mr Litvenenko, a former KGB spy who it is claimed was also working for MI6, died in 2006 after being poisoned with a radioactive substance in London.

The UK authorities believe the Russian state was behind the killing, but no one has so far been brought to justice.

The British Government is applying for a Public Interest Immunity certificate, preventing key details from being heard at the forthcoming inquest.

Mr Litvinenko's family believe the UK Government is trying to stop embarrassing revelations about the spy's links to MI6 from being aired in public.

Mr Litvinenko's widow Marina

Mr Emmerson also cited a recent trade visit Prime Minister David Cameron had made to Moscow - a trip which the QC said had secured £215m worth of business but no movement on the Litvinenko case.

Mr Emmerson said he believed the "UK and Russian Governments were trying to manipulate the inquest".

He told the coroner the case has "all the hallmarks of a situation which is shaping up to be a stain on British justice".

He said there should be no suggestion London and Moscow were conspiring together to close the inquest down.

Mr Emmerson also revealed the British Government had repeatedly refused to fund Mrs Litvinenko's legal costs for the inquest.

Coroner Sir Robert Owen intervened to say he believed it was of the utmost importance that Mrs Litvinenko be properly represented at the inquest.

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Lord Rennard: I Refute These Allegations

Former Lib Dem chief executive Lord Rennard has said he received no complaints about his behaviour during 27 years in the party.

Several women have come forward to accuse him of inappropriately touching and propositioning female party workers.

A new statement issued on his behalf said he "refutes" the allegations and will "co-operate with any properly constituted inquiry".

It added: "He would reiterate that in 27 years of working for the Liberal Democrats he received no complaint or allegation about his behaviour.

"Nor is he aware of any personal complaints being made in the three and a half years since he stood down as chief executive until last week."

Scotland Yard announced on Monday that they will meet with party officials to discuss the allegations.

Earlier Mr Clegg said the police must be allowed to do their job and insisted he would not provide a "running commentary" on the allegations.

Speaking outside his home in south west London, he told Sky News: "I understand there are many people who appear to want to act as self-appointed detectives trying to piece together events that happened many years ago but the only way that we are going to get to the bottom of the truth ... is by allowing the two investigations that I established immediately after the Channel 4 broadcast to do their job and, indeed, to allow the police, whom we have now approached, to do their job as well.

"And in the meantime I cannot and my party cannot provide a running commentary on every shred of speculation about events which happened many years ago."

Lord Rennard's statement made no reference to the police's involvement.

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Pope Gets New Title And Drops 'Prada' Shoes

By Sally Arthy, Senior News Editor, Rome

Pope Benedict XVI will be called "Emeritus Pope" after he retires later this week, the Vatican has announced.

Benedict himself had made the decision in consultation with others, settling on "Your Holiness Benedict XVI" and either emeritus pope or emeritus Roman pontiff, according to Vatican spokesman Rev Federico Lombardi.

Rev Lombardi said the Pope is praying and preparing to move out on Thursday when he officially stands down as leader of the world's 1.2billion Catholics.

Fifty thousand tickets have been given out for the Pope's final General Audience on Wednesday morning in St Peter's Square.

He will greet his followers from the Popemobile and the proceedings will be televised live.

On Thursday, Pope Benedict will meet his cardinals for the last time before leaving the Vatican that afternoon for a short flight by helicopter to Castel Gandolfo.

The Pope will give up his red shoes, rumoured to be Prada

There he will greet members of the local parish from a balcony in his last public appearance as Pope.

That night, the gates of Castle Gandolfo will close and the Swiss Guard will withdraw as Pope Benedict's tenure officially comes to an end.

Vatican police will take over guarding Benedict XVI when he is no longer the Pope.

Rev Lombardi said he will continue to wear a simple white cassock but his footwear will change.

Gone will be the red "Prada" loafers, replaced by brown shoes made in Leon, Mexico.

Cardinal Keith O'Brien resigned amid claims of 'inappropriate behaviour'

A pair was given to the Pope on a recent trip there. After Thursday, the Pope's "fisherman's ring" will also be destroyed.

Benedict XVI will remain at Castel Gandolfo until renovations have been completed on the monastery inside the walls of the Vatican where he will spend the rest of his days.

Rev Lombardi said the general congregations, when all Cardinals meet to discuss the problems facing the Catholic Church, will probably begin on March 4.

A date for the start of the conclave to elect a new Pope has not yet been announced but the rules have been changed allowing the calendar of events to be moved forward.

The election of a successor comes as the Catholic Church continues to be mired in scandal.

On Monday, Scotland's Cardinal Keith O'Brien resigned amid allegations of 'inappropriate behaviour'.

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Blackpool Primary School Teachers Suspended

A headmistress and five teachers have been suspended after a police investigation was launched into "pupil wellbeing" at their Blackpool school.

The suspensions at Revoe Community Primary School, including head teacher Cath Woodall, came after a member of Blackpool Council's education department raised concerns following a routine visit.

The council has confirmed the allegations are not of a sexual nature.

Sky News understands that the investigation is focussing on how isolation has been used as a form of punishment.

A specific allegation that a child was locked in a small room as punishment for "challenging behaviour" is being investigated.

The council say they do not know how long the child was allegedly locked in the room but that is forming part of their investigation.

They are also trying to establish whether it was an isolated incident and whether other children were also subjected to similar treatment.

Mother Veronica Varley told Sky News her son has challenging behaviour.

She said: "I just want to know if this happened to my son because if it did he's coming out of this school."

In a letter to parents, Charlotte Clarke, the council's head of universal services and school effectiveness, wrote: "Before half-term, Blackpool Council became concerned about the professional judgment made by these staff in relation to the wellbeing of pupils when isolating them during challenging behaviour.

"This has led to six members of staff being suspended. The suspensions are a neutral act to allow a full investigation to take place as quickly as possible.

"I realise this will be concerning news and I am writing to reassure you that swift action has been taken and the priority of the council is always the wellbeing of pupils."

Cllr Sarah Riding, cabinet member for education and schools, said an experienced head and temporary staff had been drafted in and parents were being kept up to date.

She said: "Before half term, we were made aware of an issue at Revoe Primary School that raised concerns to us about the professional judgment made by a number of staff in relation to pupil wellbeing.

"These concerns have led to the suspension of six members of staff while a full investigation is carried out. It would not be appropriate to comment further on the nature of the investigation until it has been concluded.

"Although we have no reason to suspect any child has come to harm, this is a serious situation that needed immediate action to be taken.

"In the meantime, temporary staff have been recruited and there will be no disruption to children's learning. All parents will receive a letter explaining the current arrangements in place."

A spokesman for Lancashire Police said: "This allegation, like any allegation involving the wellbeing of young people, is being taken extremely seriously and will be thoroughly investigated as our priority is the safeguarding of young people.

"We are in the early stages of this inquiry and are working closely with the school and the local authority to establish the circumstances. No arrests have been made at this stage."

The school, on Grasmere Road, teaches children aged between two and 11 years old. It has more than 400 pupils and employs about 70 people, including teachers and support staff.

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Pistorius To Hold Private Memorial For Reeva

Oscar Pistorius is to hold a private memorial service for his girlfriend Reeva Steenkamp at his uncle's house in Pretoria tonight.

The South African athlete, who has been charged with murdering the 29-year-old model, has admitted killing her but denies murder.

Pistorius has been staying at his uncle Arnold's home since he was released on bail by a magistrate last Friday following a court hearing over several days.

Ms Steenkamp's funeral was held last week at the same time as the hearing was taking place.

Confirmation of the memorial service came after a leak in the media, and the runner's family has asked for privacy.

A statement by Pistorius' representatives said: "This statement is released in response to a leak to the media regarding a planned private memorial service for Reeva Steenkamp.

"Oscar Pistorius, will hold a private memorial service for Reeva Steenkamp at the house of his uncle, Arnold Pistorius, tonight.

"Oscar specifically requested the memorial service as he continues to grieve and remains in deep mourning for the loss of his partner Reeva.

"Since it is such a sensitive issue, Oscar has asked for a private service with people who share his loss, including his family members who knew and loved Reeva as one of their own.

"The Pistorius family would like to make a personal request to the media, to please respect their privacy at their home in Pretoria tonight."

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Egypt Balloon Explosion: Three Britons Dead

Two British nationals and a British resident were among 19 people killed when a hot air balloon exploded near the ancient Egyptian city of Luxor.

Another British national survived and was in a Luxor hospital in a stable condition, the Foreign Office said. 

The British resident is understood to be Hungarian.

Two of the Britons involved the crash have been named locally as Michael and Yvonne Rennie from Perth, the Press Association said.

The only other survivor was the pilot, an Egyptian man, who also remained in hospital.

The site at Luxor 40 minutes before the crash (Pic: @chrismichel)

He jumped from the basket when it was 10-15m (yards) from the ground, said Ahmed Aboud, head of an association representing Luxor balloon operators. 

The balloon, which was carrying 20 tourists and the pilot, was preparing to land when a cable got caught around a helium tube and a fire erupted, according to an investigator with the state prosecutor's office.

The balloon then shot up in the air, the investigator said. The fire set off an explosion of a gas canister and the balloon plunged some 1,000 feet (300m) to the ground, according to an Egyptian security official.

It plunged into sugar cane fields as it travelled over Qurna, in Luxor's West Bank.

France's Foreign Ministry has confirmed that two French nationals also died in the crash.

Japanese citizens, as well as nine tourists from Hong Kong, are believed to be among other casualties.

The British resident initially survived the crash, but died later in hospital.

In confirming the "tragic deaths", the Foreign Office said: "The next of kin have been informed and our thoughts are with them and their families at this difficult time.

"We are providing them with consular assistance. We can also confirm that one other British National was involved and is in a stable condition.

"We have had consular officials in Luxor since early this morning who have been focussed on providing consular assistance and supporting the Egyptian authorities.

Ballooning in Luxor is very popular with tourists visiting its temples

"Our ambassador to Egypt has met the injured British national and has offered our assistance."

Luxor Governor Ezzat Saad has imposed an immediate ban on all hot air balloon flights in the province as Prime Minister Hesham Qandeel ordered an investigation into the accident.

Witness Christopher Michel was travelling in one of several balloons in the air above Luxor early on Tuesday morning.

He told Sky News: "I was in one of about eight balloons that were flying that morning. We were approaching landing ... coming down in a remote field just outside of Luxor.

"We heard a loud explosion behind us, and I looked back and saw lots of smoke. It wasn't immediately clear that it was a balloon. We were surrounded by the balloons that had been flying with us.

"Then we could see the reaction of the pilot on the balloon and he said that this hasn't happened in a long time."

Thomas Cook UK & Continental Europe CEO Peter Fankhauser said: "What happened in Luxor this morning is a terrible tragedy and the thoughts of everyone in Thomas Cook are with our guests, their family and friends.

"We have a very experienced team in (the) resort ... and we're providing our full support to the family and friends of the deceased at this difficult time."

Hot air ballooning is popular with tourists who go to Luxor to visit its ancient temples and the tombs of the Valley of the Kings.

But the activity is not without its dangers. In April 2009, 16 people were hurt - including two British women - when a balloon crashed during a tour of Luxor.

The balloon was believed to have hit a mobile phone transmission tower near the banks of the Nile.

Following the 2009 crash, early morning hot air balloon flights over the Valley of the Kings were suspended for six months while safety measures were tightened up.

During the break, all 42 pilots from the eight companies who operate flights had extra training.

A notice on the Foreign Office website warns tourists: "There were three serious hot air balloon accidents in Luxor in 2009. You should consider the operator's safety arrangements carefully."

Egypt's tourism industry has suffered a sharp downturn in visitor numbers since the 2011 uprising that toppled President Hosni Mubarak, with two years of political instability scaring off foreign tourists.

Thomas Cook UK has opened a hotline for families who have relatives in Egypt: 0800 107 5638.

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