Premier Silvio Berlusconi said Wednesday he will resign and immediately form a new government, with the same center-right coalition partners, in a bid to overcome a political crisis that has undermined his ruling coalition.
Berlusconi had been struggling with the worst crisis in his four years in government since a crushing defeat at a regional vote this month.
"This time, no surprises. Today I resign and I go to the head of state," Berlusconi told the ANSA news agency.
Berlusconi told the upper house of parliament, during a confidence debate in his four-year-old administration, that he was determined to serve out his full five year term, which is due to end in the Spring of 2006.
He said he had had assurances from all four coalition parties that they were willing to back his new administration.
Won't reach goal
The resignation crushes Berlusconi's ambition to make his government the first one since World War II to serve the full five-year term.
Berlusconi was forced to hold the confidence debate when two coalition parties demanded he make sweeping changes after his coalition was heavily defeated at recent regional elections and a senior coalition partner threatened to quit.
Under the terms of the Italian constitution a prime minister is obliged to resign if he makes major changes to his cabinet.
The National Alliance party said it would still support the center-right coalition, but that the continued participation of its ministers "depends solely on what Berlusconi will say and do."
National Alliance ministers had prepared letters of resignation and the party's leaders were preparing to meet following Berlusconi's address to parliament.
The National Alliance is the coalition's second-largest party after Berlusconi's own party. If its five ministers, including Foreign Minister Gianfranco Fini, resign from the Cabinet, there's little chance the government can survive and Berlusconi would likely be forced into early elections.
The political turmoil was triggered by a crushing defeat in regional elections this month. The billionaire media mogul's popularity has fallen amid sluggish economic growth and Italy's unpopular military mission in Iraq.