* Message comes before Senate vote on his expulsion
* Berlusconi may resign after Senate vote - sources
* Berlusconi steps back from causing govt collapse
By Barry Moody
ROME, Sept 17 (Reuters) - Silvio Berlusconi is expected to step back from moves to bring down Italy's government following his tax fraud conviction in an announcement on Tuesday relaunching his original party, political sources said.
Berlusconi has been threatening for weeks to torpedo the uneasy left-right coalition of Prime Minister Enrico Letta following his conviction, but the sources said dovish advisers seemed to have finally convinced him this could misfire for his centre-right PDL party.
The Berlusconi announcement is expected in a video message around midday (1000 GMT). He has already recorded the message, aides said.
Renato Brunetta, floor leader in the Chamber of Deputies for Berlusconi's People of Freedom Party (PDL) said in a tweet that his leader "Will make a very important announcement about Forza Italia (Go Italy), aiming to inspire everybody."
The party was the vehicle with which Berlusconi stormed into politics in 1994 after a major bribery scandal swept away the old postwar order in Italy. It was later replaced by the PDL.
A Senate committee is expected to vote on Wednesday to reject attempts to prevent Berlusconi's ejection from parliament following a conviction for a huge fraud at his Mediaset television empire.
Some sources said on Tuesday that Berlusconi was considering resigning before a full Senate vote to expel him, but this could come in a second video message after the committee vote on Wednesday night.
Berlusconi appears to be using the resurrection of his original Forza Italia party to try to seize back the political initiative following the damaging conviction, which has condemned him either to a year's house arrest or community service.
Il Giornale newspaper, run by Berlusconi's brother, suggested the media tycoon was espousing a more conciliatory line towards Letta's government, an uneasy coalition of the PDL and the premier's centre-left Democratic Party (PD).
"To sum up, Berlusconi could once again put the interests of the country before his own to demonstrate his stature as a statesman," the paper said.
Libero, another daily close to the billionaire media magnate, said there were two video messages, one for Tuesday and one for Thursday. In the first, Berlusconi would again state his total innocence of the fraud charge and announce that "as far as he is concerned the government can continue."
Berlusconi has been planning the relaunch of Forza Italia for months, seeing it as a way to reinvigorate centre-right voters and appeal more to young people than the PDL which is seen by many as dominated by an older generation of political hacks.
Ever since the supreme court confirmed Berlusconi's conviction in early August, many of his party allies have threatened to bring down the government if the centre-left votes for his ejection from parliament.
But party doves, family members and leaders of his business empire have recently apparently persuaded him that torpedoing the government and causing elections in the midst of Italy's worst postwar recession would misfire for the centre-right.