Berlusconi resigns to form new government

Italian prime minister Silvio Berlusconi said on Wednesday that he resign, but pledged to form a new government immediately, in an attempt to strengthen a government coalition hobbled by electoral defeat and concerns over Italy's sluggish economy

Italian prime minister Silvio Berlusconi said on Wednesday that he resign, but pledged to form a new government immediately, in an attempt to strengthen a government coalition hobbled by electoral defeat and concerns over Italy's sluggish economy.

His announcement at the Senate will bring to an end Italy's longest-serving government since World War II. Berlusconi had been under pressure to resign since a stinging defeat at regional elections earlier this month.

"The regional elections showed a clear sign of discomfort," Berlusconi told the Senate. "I want to give an adequate political response."

He said he would offer his resignation to Italy's president later on Wednesday - but added that he was confident that a new government would relaunch the center-right coalition.

Once a government resigns, it is up to the president to designate a candidate to try to form a new government. President Carlo Azeglio Ciampi is likely to choose Berlusconi.

Berlusconi has been struggling to hold his 4-year-old government together, and a senior coalition partner threatened on Tuesday to quit the government in a further setback.

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."

The party's ministers had prepared letters of resignation and its leaders were planning to meet following Berlusconi's address to parliament.

The National Alliance is the coalition's second-largest party after Berlusconi's own party. There was little chance that the government could have survived if the party's five ministers - including Foreign Minister Gianfranco Fini - had resigned.

The billionaire media mogul's popularity has fallen amid sluggish economic growth and Italy's unpopular military mission in Iraq.