The heads of Italy’s political groups will decide on Monday when to hold a no-confidence vote, days after nationalist leader Matteo Salvini announced he was pulling the plug on the populist coalition government.
Mr Salvini wants snap elections, but faces a challenge from his ex-coalition partner and the opposition centre left.
Ex-Prime Minister Matteo Renzi is calling for a caretaker government.
A final decision on the next step rests with the president.
Mr Salvini’s nationalist League party has been in government with the populist Five Star Movement for the past 14 months, but relations between the parties have turned sour. The government is headed by an independent prime minister, Giuseppe Conte.
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The centre-left Democratic Party (PD) were voted out of government last year.
Now, ex-PD leader Matteo Renzi has returned to the political arena with a call to stop Mr Salvini’s “crazy” push for elections by proposing a caretaker, “institutional” government backed by parliament.
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Five Star leader Luigi di Maio, who has seen his party ratings eclipsed by the rise of the League, is also opposed to new elections, insisting that reform of parliament has to come first.
Some Five Star colleagues have indicated they are not averse to forming a coalition with the centre left. “Having ruled with the League, I think we’d even agree to a deal with Beelzebub,” leading Five Star official Roberta Lombardi told La Repubblica.
But there is one big sticking point. Centre-left leader Nicola Zingaretti has thrown cold water on the idea and placed his trust in President Sergio Mattarella to find a way out of the impasse.
What Salvini wants
Buoyed by the League’s lead in the opinion polls, the nationalist interior minister is seeking a no-confidence vote in the prime minister and new elections.
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A confidence vote could come after a debate in the Senate as early as Tuesday, with elections in October, although it is more likely to be agreed early next week. Mr Conte is due to visit Genoa on Wednesday to commemorate the victims of a deadly bridge collapse there last August.
A decision is due to be made when Senate political leaders meet on Monday at 16:00 (14:00 GMT).
To stand any chance of winning a vote Mr Salvini would need the support of Silvio Berlusconi’s centre-right Forza Italia as well as the far-right Brothers of Italy party.
Mr Salvini has returned from a campaign tour of beaches in Sicily to rally support in Rome.
Only the president, currently on holiday on a boat in Sardinia, has the power to dissolve parliament. He has insisted next year’s budget has to be approved this autumn, so the window for an election is very small.
Could Salvini be stopped?
Five Star and the PD could cobble together a government but this political crisis could equally trigger a split in the centre left.
Five Star is particularly keen to push through its proposed political reform, bringing down the number of seats in Italy’s two chambers of parliament by 345 (out of 945) before new elections. The centre left could in principle allow that to happen.
Then there is the issue of Italy’s budget deficit. The Rome government has until the end of October to submit its 2020 budget to the European Commission.
Both Five Star and Matteo Renzi are desperate to avoid an increase in sales tax, which would come into place in January if a budget is not agreed.
A League official said on Monday that instead of implementing an increase in sales tax, it would raise Italy’s budget deficit to 2.8% of economic output.