Italy and Europe were tonight bracing themselves for a general election and the real possibility that the scandal-plagued billionaire Silvio Berlusconi could become prime minister for a fourth time.
The premier Mario Monti announced on Saturday he would step down as soon as parliament had approved next year's budget. By on Sunday evening pundits were suggesting the poll could be as early as mid-February if parliament passed the finance bill by the end of this year.
Mr Monti's move followed the decision by Mr Berlusconi's PDL (People of Freedom) Party to withdraw its support from the unelected technocrat administration, which was put in place a year ago after scandals and the debt crisis forced Mr Berlusconi out of office. "I came to the conclusion we could not continue like this any longer," Mr Monti told the Corriere della Sera. His government had a mandate until April.
The markets had already reacted nervously to the suggestion Mr Monti's stint as prime minister would end early, when the PDL withdrew its support on Thursday. Further share price falls and dramatic rises in Italy's borrowing costs were expected tomorrow morning. For several months Mr Berlusconi, 76, has been stepping up attacks on the Monti government, saying it has failed to create economic growth.
The final straw for the notoriously egotistical Mr Berlusconi appeared to be comments by Mr Monti's Economic Development Minister, Corrado Passera, that re-electing the tycoon would be a step backwards.
"I am running to win," Mr Berlusconi said, even though the polls suggest that the mogul and his divided party will be thrashed by the recently reinvigorated centre-left Democratic Party. Italy's left has demonstrated many times, however, its ability to snatch defeat from the jaws of victory.
Mr Berlusconi, who was convicted of tax fraud in October, has motives other than pride for running again. The media tycoon is fearful that his already tarnished record will be stained with sex and abuse of office convictions in the Rubygate trial, a verdict in which is expected in the next two or three months. As Prime Minister, he would be better placed to impede the legal process.
Last night some political analysts suggested Mr Monti's decision could also be a way for him to follow his own political ambitions.