#DILMA : Sparks fly in Brazil debate as Rousseff on offensive

By Todd Benson

SAO PAULO (Reuters) - Brazil's ruling party presidential candidate Dilma Rousseff lashed out at rival Jose Serra in a debate on Sunday, striking her most aggressive tone of the campaign as she sought to halt Serra's momentum in the lead-up to the runoff vote.

A combative Rousseff lambasted Serra as a pawn of foreign investors and accused him of running a smear campaign against her, a week after her campaign was dented by last Sunday's weaker-than-expected showing in the first round vote.

"Your campaign is trying to do harm with lies, slander and defamation," said Rousseff in her opening remarks, responding to accusations that she favours legalizing abortion -- charges that turned off religious voters and contributed to her failure to win the first-round outright.

Rousseff's lead has dwindled from more than 20 percentage points to only 7 in the latest poll for the October 31 runoff to determine who will become the leader of one of the world's fastest-growing emerging markets.

She hammered away at Serra's involvement in 1990s privatizations widely backed by investors but that many Brazilians still believe were harmful to the country's economy. She also celebrated a recent share offering by state-oil company Petrobras that boosted state control over the firm.

Neither candidate is expected to make major changes to the economic growth strategy set out by wildly popular President Luiz Inacio Lula da Silva, Rousseff's mentor who helped turn the once-unknown civil servant into the leading candidate.

Serra portrayed Rousseff as two-faced on moral issues including abortion and belief in God, seeking to tap religious voters who helped sway many against her and turn what was expected to be a blow-out into a competitive race.

"You defended (abortion) and then you went on to change your position," said Serra, a former governor of Sao Paulo. He appeared more confident than in previous debates but at times taken off guard by Rousseff's aggressive stance.

"It's the same thing when it comes to God, first you don't know if you believe or not, then all of a sudden you're devout," he said.

He lashed out the ruling Workers' Party for failing to control rampant drug-related crime as well as shoddy infrastructure such as ports and roads that have slowed the country's economic development.

Hosted late on Sunday night during a long weekend, the debate is unlikely to be a game changer for the elections.

Previous debates had little discernible effect on the campaign, and generally struggled to compete for viewership with Brazilian soccer matches broadcast at the same time.

Public opinion group Datafolha on Saturday showed Rousseff winning 48 percent support compared to 41 percent for Serra, with 11 percent of respondents saying they would vote for neither or were undecided.

"That poll shows that we are still in front and are very sure of ourselves," said Sao Paulo state deputy Rui Falcao of the Workers' Party, who attended the debate.

(Writing by Brian Ellsworth; Editing by Vicki Allen)

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