ROME: Italy's outgoing prime minister Mario Monti criticised election rival Silvio Berlusconi over family values on Wednesday, prompting the three-time premier to lash out saying Monti had "no credibility" after breaking a promise not to enter politics.

"Berlusconi has used unsuitable weapons against me, like family values. Say no more," Monti said in an interview with Rai public radio in a thinly-veiled reference to the flamboyant media tycoon's much-publicized sex scandals.

"I think ethical values are fundamental and need to be defended. I hate parties that make use these ethical values, which they often do not respect in daily life, as a weapon against their rivals," he said.

Berlusconi has launched an extraordinary sixth bid for election in two decades in politics with a series of attacks on Monti including for failing to uphold family values in his election platform.

In an interview on news channel Sky TG24 later on Wednesday, Berlusconi said of Monti: "What he says has no credibility for intelligent Italians."

He accused Monti of "adopting the rules of austerity proposed by Germany" and said he had installed a "climate of terror" and a "tax police state" with his crackdown against tax evasion.

A former European commissioner and economist, Monti was installed by parliament to replace Berlusconi in November 2011 as head of an emergency government with the task of rescuing Italy from bankruptcy.

Monti now leads a coalition of centrist parties calling for liberal reforms and more engagement with Europe, against Bersani's Democratic Party and Berlusconi's People of Freedom party.

Early elections were called last month after Berlusconi pulled his party's support for Monti in parliament and are scheduled for February 24-25.

"Berlusconi confuses me with his logic and sometimes with his excessive praise... First he says that the government has been a disaster, then that it did everything it could. I hope voters are less confused then me," Monti said.

The 69-year-old caretaker premier also defended the record in office of his unelected technocratic government, saying it had managed to crack down on rampant tax evasion and avert a looming disaster on Italy's public finances.

"The light at the end of the tunnel is closer than before and I am far more optimistic that in the meantime the tunnel will not collapse and destroy us as it threatened to do," he said.

Monti later took to Twitter to express his satisfaction that the spread between Italian and benchmark German government bonds had narrowed by half from the level it was at when he took power.

"The spread today has finally reached 287 points," Monti said. The closely-watched measure of investor risk had reached 574 points in late 2011.

Turning to Europe, Monti said he would be an "incisive" member of the European Council as prime minister and was respected by European leaders.

"I believe that in the European Union I am known for what I did as commissioner and in these 13 difficult months as premier," he said.

Asked about the explicit endorsement for his election campaign from the Vatican, Monti said: "I don't know if I've been blessed by the Church. It's important for me and for my conscience as are other encouragements."