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UPDATE 2-Italy's 5-Star, League seek president's backing on PM

* Govt program includes slashing taxes, hiking spending

* Bond yields rise sharply on fears of spending spree

* If president agrees, govt could take office this week (Adds analyst comment)

ROME, May 21 (Reuters) - Italy's anti-establishment 5-Star Movement and the far-right League will seek the backing of the president on Monday for their candidate to lead a coalition government whose plans to jack up spending have roiled financial markets.

Eleven weeks after an inconclusive election, the rival parties are poised to put forward a prime minister whose program -- agreed last week -- calls for billions of euros in tax cuts, additional spending on welfare for the poor, and a roll-back of pension reforms.

While the premier's name has not been confirmed, Italian media say the leading candidate is a little-known university professor, Giuseppe Conte, who is not a lawmaker, but was proposed as a possible minister by 5-Star before the vote.

President Sergio Mattarella has the final say on who becomes premier. If he should give his blessing after the meetings, which start at 1530 GMT, the parties could put a cabinet together rapidly and hold confidence votes in parliament later this week.

The euro slipped and Italian bond yields rose sharply on Monday on fears that the new government will go on a spending spree that will increase an already huge debt pile -- worth more than 130 percent of output -- and put it in contravention of European Union fiscal rules.

Markets were also hammered last week when the two parties presented their government plans.

"If Italy's President Mattarella lays out the constitutional boundaries to the government-to-be, it may calm some market nerves, but the anti-establishment parties' true colors cannot be unseen," said Benjamin Schroeder, senior rates strategist at ING.

Over the weekend, both the 5-Star and the League pushed back against the concerns over their spending plans.

In a blog post, 5-Star dismissed suggestions they would bust public finances. It said expenditure would be spread over the five-year legislature and would be accompanied by spending cuts.

League chief Matteo Salvini rejected a call by French Finance Minister Bruno Le Maire for Italy to respect its EU budget commitments, saying on Twitter: "We will do the opposite of what preceding governments have done. Am I wrong?"

On Monday, European Central Bank council member Ewald Nowotny said he hoped the new Italian government's approach would be "much wiser" than what he had read about in newspapers.

CABINET

Italians appear to want the tie-up. Some 60 percent are in favor of a 5-Star/League coalition government, a Demos & Pi poll published on Sunday showed. More than 80 percent of 5-Star and League voters back it, the poll said.

The likely prime minister candidate, the 54-year-old Conte, was put forward before the election as 5-Star's possible pick as public administration minister. He is seen as a compromise candidate, a technocrat who can balance the demands of the rival parties.

Conte has worked as a lawyer as well as an academic, and has studied for brief spells at Yale and New York University in the United States, at Cambridge in Britain and other foreign universities.

5-Star leader Luigi Di Maio and the League's Salvini are also both expected to serve in the cabinet, Italian newspapers said.

Di Maio is tapped to become the labor and welfare minister to ensure the passage of the movement's cornerstone election promise, a universal income for the poor.

Salvini is seen taking over the Interior Ministry, which handles immigration issues.

The arrival of more than 600,000 boat migrants on Italy's shores over the past four years has fueled the anti-immigrant League's popularity, catapulting it ahead of former prime minister Silvio Berlusconi's Forza Italia on the right.

More than one name has circulated for the key economy ministry portfolio. Paolo Savona, an 81-year-old economist and former industry minister, has been mentioned most, though Salvini's top adviser Giancarlo Giorgetti could also get the job, newspapers said.

(Reporting by Steve Scherer Editing by Gareth Jones)