Premier wins in House but loses majority in Senate - Premier Romano Prodi won a confidence vote in the House on Wednesday but he is expected to resign after defections in his coalition made it clear he did not have a majority in the Senate.
The vote saw 326 MPs voting in favor and 275 against the confidence motion.
Prodi had originally planned to go to the Senate on Thursday to seek its confidence but is now expected to tender his resignation to President Giorgio Napolitano after meeting with his cabinet early Thursday morning.
The premier and head of state conferred on Wednesday and Napolitano is reported to have suggested to Prodi that he not seek the Senate's confidence if he does not have the votes necessary.
Should Prodi resign, Napolitano would then confer with the former heads of state, the speakers of the Senate and House and political party leaders before making any decision.
He has a series of options open to him including asking Prodi to try and form a new government, giving an institutional figure like the Senate Speaker Franco Marini an exploratory mandate to try to form an interim government to adopt needed reforms before elections or calling early elections and asking Prodi to stay on in a caretaker capacity.
Officially most parties say they would prefer early elections but there is a cross-party groundswell for adopting reforms first, which would involve having an interim executive.
The government crisis began on Monday when the Udeur party of ex-justice minister Clemente Mastella said it had withdrawn its support from the government and would vote against it in any confidence vote.
However, the Udeur did not take part in the House vote because their votes would not have been decisive and the confidence motion was on the government's achievements over the past 20 months to which the party had contributed.
The Udeur confirmed it would vote against Prodi in the Senate.
Without the Udeur's votes in the Senate Prodi no longer had a majority and the situation here became worse after other senators who had backed his government said he no longer had their support.
These included independent conservative Domenico Fisichella and former ally Lamberto Dini, while leftist Franco Turigliatto confirmed he would vote against Prodi. Mastella decided to bring down the government citing differences on a number of issues including electoral reform, a proposed referendum on the current electoral law and relations with the new Democratic Party, which was created through the fusion of the Democratic Left and centrist Daisy parties. He also cited a lack of support from his ex-allies after his wife, Campania region assembly Speaker Sandra Lonardo, was placed under house arrest and he under investigation in connection with an alleged system of peddling political favors and influencing public tenders in the region.
