By Gavin Jones

L'AQUILA, Italy (Reuters) - Seven years after being devastated by an earthquake that killed more than 300 people, L'Aquila's abandoned city center is a stark reminder of the struggle facing Italian towns hit by a quake last week.

Scaffolding still covers the city's Baroque buildings, the skyline is dominated by cranes, most of the dusty streets are deserted and many areas remain cordoned off.

"This place is one big building site," said Luca Dioletta, the owner of Bar Duomo in the L'Aquila's main square, dominated by the neoclassical cathedral which is one of few buildings not shrouded in protective tarpaulins.

Bar Duomo, which opened just a month ago, is the only bar or restaurant in the square which used to teem with life before the quake struck on April 6, 2009.

Prime Minister Matteo Renzi's promise to rebuild Amatrice and other mountain towns ravaged by last week's tremors echoed pledges made by former premier Silvio Berlusconi to some 80,000 people who lost their homes in and around L'Aquila in 2009.

In power since February 2014, Renzi will be determined to prove himself a more able leader than Berlusconi and avoid the many errors made in L'Aquila, which lies just 56 km (35 miles) south of Amatrice.

Reconstruction here has been held up by bureaucracy and corruption, while billions of euros were spent on unpopular housing projects, or "new towns", with rows of identical dwellings built on special quake-proof platforms.

Residents say that while these brand new estates are comfortable enough, they lack any sense of community.

"Look around you, there are no services, no bars, no restaurants, no newsstands, just houses surrounded by nothing," said Ottavio Masciovecchio, 60, who lives in the Paganica new town some 10 km outside L'Aquila.

Masciovecchio, who was born in the nearby village of Paganica, says he has lost all hope of ever returning to his former home and speaks bitterly as he walks around the boarded up houses and debris in the narrow streets where he used to live.

"They say Paganica is being rebuilt but it's a lie. I'd like to show this mess to the whole world," he said.

Renzi's ministers say they will not let the communities around Amatrice die, but they have not explained how they can speed up Italy's rebuilding efforts and have declined to speculate when the reconstruction might be complete.

"This is not about setting challenges and making promises. We need the pace of a marathon runner," Renzi said on Thursday.


Some 21 billion euros ($23 billion) was earmarked for L'Aquila's reconstruction, but so far only 7 billion euros has been spent.

Local residents say the project has been snarled by inefficient use of the resources and cloying red tape, scourges that repeatedly trip up the euro zone's third largest economy.

The housing projects were expensive, costing 2,000-3,000 euros per square meter, and residents and architects say the money could have been better spent on demolishing and rebuilding old houses or on more modest but temporary dwellings.

The new towns were strongly supported by Berlusconi himself, who made his first fortune as a construction magnate.

Marco Morante, an architect from L'Aquila who has worked with the town council and private contractors, described the failure to involve the local community in decisions over reconstruction as a mistake.

"Nearly everything was dictated by the central government, with a sort of military occupation of the area by the Civil Protection Department which alienated the townspeople," he said.

Masciovecchio said reconstruction contracts in L'Aquila went to firms from abroad or other parts of Italy and few local residents had been hired. His son, who had worked in a local bakery, left to seek work abroad and now lives in Finland.

Morante, who estimated that only 5-10 percent of the center of L'Aquila had been rebuilt, said bureaucracy was mainly to blame, with a bewildering series of changes in the rules on project allocation and construction permits.

Some of these changes were triggered by evidence that another Italian plague -- organized crime -- had infiltrated the reconstruction effort. In 2014 seven building contractors were arrested on allegations they had collaborated with the Naples mafia, the Camorra, to obtain cheap labor.

Morante said Amatrice and the other towns hit by this week's earthquakes could learn from L'Aquila's experience, but there were important differences.

For example, only an estimated 2,500 people had been made homeless in the latest disaster, far fewer than in L'Aquila. However, a higher proportion of the houses were leveled and will have to be completely rebuilt.

The risk for Amatrice and the surrounding towns is that if the rebuilding takes too long, the local youngsters will drift away, dealing a potentially fatal blow to communities where pensioners already make up a large proportion of inhabitants.

"I'm afraid our village and others will just die," said Salvatore Petrucci, 77, who lost his house in Trisunga on Wednesday. "We may be the last people to have lived (here)."

After an earthquake hit southern Italy near Naples in 1980, some survivors had to wait more than 20 years before their damaged properties were restored.

Leonardo Innocenzi, 62, who was born and brought up in the center of L'Aquila, lives in a "new town" 5 km away and says with resignation that he hopes he can get back to his old home within "two or three years, maybe four."

"I think it will need another 8-10 years for this city to return to anything like it was, and we will have to see if it ever become the community that it used to be."

($1 = 0.8932 euros)

(Editing by Crispian Balmer and Timothy Heritage)