Italian Prime Minister Giuseppe Conte resigned on Tuesday after lashing out at far-right Interior Minister Matteo Salvini for pursuing his own interests by pulling the plug on the government coalition.
The move leaves the eurozone's third largest economy in a political vacuum until President Sergio Mattarella decides whether to form a new coalition or call an election after talks with parties in the coming days.
Mattarella charged Conte with heading a caretaker administration after he handed in his resignation, pending consultations on a new government which are set to begin at 1400 GMT on Wednesday.
"I'm ending this government experience here," Conte said after an almost hour-long speech to the Senate.
"It is irresponsible to initiate a government crisis," Conte said after Salvini tried to bring down the government in the hope of snap elections he believes will make him premier.
Senators display signs of protest against Deputy Prime Minister and Interior Minister Matteo Salvini. Source: AAP
Conte was speaking following a week of fallout from Salvini's decision to back out of the alliance between his League party and the anti-establishment Five Star Movement on August 8, plunging Italy into political turmoil.
After Conte announced his intention to resign, Senate speaker Elisabette Casellati told Salvini to leave the government bench and join his party's senators, where Salvini said: "Thank you, finally, I would do it all again."
Full powers
The Italians vote with their heads and hearts," Salvini said, invoking the Virgin Mary to "protect the Italian people" and repeating his call for snap elections while also making a final appeal to M5S.
Caught on the back foot, Salvini last week made the surprise offer to back a key M5S proposal to cut the number of lawmakers from 950 to 605, but only if new elections were then swiftly held.
"Making citizens vote is the essence of democracy, asking them to vote every year is irresponsible," Conte said as League senators booed and hissed.
"I heard you calling for 'full powers' and invoke (demonstrations in) the piazzas to support you, which worries me," Conte said.
Italian dictator Benito Mussolini in 1922 assumed so-called full powers to govern the country at his whim.
Supporters of the Five Star Movement (M5S) rally outside the Senate where Italian Prime Minister Conte is addressing the Parliament in Rome. Source: AAP
After more than four hours of debate, Conte returned to speak before going to Mattarella's office at the Quirinale Palace.
"If there was a lack of courage, then I assume responsibility before the country," Conte told the Senate as Salvini fidgeted nervously.
"And I note that the leader of the League who has struggled with loyal cooperation lacked the courage to assume responsibility for his behaviour," Conte said.
The end of the 14-month-old coalition government opens the way for Mattarella to begin consultations with political parties, with a range of options available.
A snap election, the forming of a new coalition without holding a new vote, and, although unlikely, the continuation of the current government would all be considered.
Debt-laden economy
The political crisis has raised concerns about the Italian economy, whose debt ratio at 132 percent of gross domestic product is the second-biggest in the eurozone after Greece.
Since the unwieldy government was formed in June 2018, uncertainty under the coalition has cost the country an extra five billion euros ($5.54 billion) in interest on its debt.
Mr Salvini's plan for a snap election -- more than three years early -- had envisioned a vote in October followed by him being crowned as prime minister.
According to opinion polls, the League could form a coalition with the anti-immigration, anti-LGBT Brothers of Italy, and possibly Silvio Berlusconi's centre-right Forza Italia.
But a bid by his rivals to put aside their differences and forge an alliance could derail Mr Salvini's plan, with a coalition between M5S and the opposition centre-left Democratic Party (PD) being discussed.
While there is bad blood between the two parties, M5S is languishing in the polls and wants to avoid an early election.
Giuseppe Conte (R) with Matteo Salvini (L). Source: AP
A PD-M5S coalition could lead to the opposite of what Mr Salvini intended -- with him out of government altogether instead of being its sole leader.
Former PD premier Matteo Renzi on Tuesday said that he "would not be part" of a PD-M5S alliance, as many in the anti-establishment party resent him as part of the old elite.
'Untrustworthy traitor'
According to some analysts, Mr Conte could also stay on as premier while trying to form an alliance with PD.
M5S leader Luigi Di Maio sent an open letter on Tuesday calling for Mr Conte to take this option, describing him as a "rare pearl, a servant of the nation that Italy cannot lose".
Mr Salvini has been furious at the idea of being squeezed out by a M5S-PD alliance, saying he would get his supporters to "peacefully take to the streets" if it came about, although he made no mention of this call in the Senate.
But M5S founder, the comedian Beppe Grillo, has rejected talk of reconciliation with Mr Salvini, whom he reportedly described as an "untrustworthy traitor".
