By William Horsley BBC European affairs correspondent

Italian Prime Minister Silvio Berlusconi swiftly condemned the murder of senior government official Marco Biagi, saying terrorism had to be fought by every means in the government's power.

Professor Marco Biagi, who was shot dead outside his home in Bologna, was an adviser to the labour ministry who was helping to draft controversial new laws aimed at making it easier for employers to hire and fire workers.

The much-feared Red Brigades ostensibly ended its campaigns a decade ago

His cold-blooded murder has shown up the fragility of Italy's democratic politics.

Mr Berlusconi spoke of the need to end a spiral of political hatred.

His Europe minister, Rocco Buttiglione, placed the blame on those on the fringes of politics who want civil war and who would not hesitate to use political murder.

Evidence for who killed Professor Biagi is scant.

No group has publicly taken responsibility.

Terror organisation

A star-shaped symbol of the much-feared, far-left wing Red Brigades has been found at the scene.

But the Red Brigades' campaign of kidnappings and killings against establishment figures appeared to end a decade ago.

And the murder three years ago of another government economics adviser in similar circumstances, although ascribed to the so-called New Red Brigades, has not been clarified.

Controversial changes to labour laws may be behind the killing

The Italian authorities imply that the likely motive for this murder was to stop the government from pushing through labour law reforms aimed at ending the rigid legal protection of many categories of jobs, so making the country's economy more competitive.

Trade unions and the left-of-centre opposition have called for strikes and demonstrations against those changes.

But union leaders quickly condemned Tuesday's killing and organised new demonstrations against political violence.

The death of Professor Biagi adds fear and confusion to the picture of Italian politics.

It remains to be seen if Mr Berlusconi's centre-right coalition will stand by its commitment to reform the labour laws, in line with European Union policies to promote business which were re-affirmed at last week's EU summit in Barcelona.

And until those responsible are brought to justice, serious doubts will remain about Italy's political stability.