Italys parliament gave final approval to a financial stability law on Saturday,paving the way for Prime Minister Silvio Berlusconi to resign and make way for an emergency government headed by former European Commissioner Mario Monti.
Berlusconi,who failed to secure a majority in a crucial vote on Tuesday,promised to resign once the parliament passed the package of economic reforms,demanded by European partners to restore confidence in Italys strained public finances.
He was due to hand in his resignation to President Giorgio Napolitano after a cabinet meeting on Saturday,marking the final act of the Berlusconi government and bringing an end to one of the most scandal-plagued eras in Italys post-war history.
Napolitano is expected to ask Monti to try to form a new administration to face a widening financial crisis which has sent Italys debt costs to unmanageable levels and threatened to escalate into an emergency across the whole euro zone.
Monti,named by Napolitano as a Senator for Life on Wednesday,is expected to appoint a relatively small cabinet made up of technocrat specialists to steer Italy through the crisis.
With the next elections not due until 2013,a technocrat government could have about 18 months to pass painful economic reforms but will need to secure the backing of a majority in parliament and could fall before then.
Berlusconi,fighting an array of scandals and facing trials on charges ranging from tax fraud to paying for sex with an under-aged prostitute,had been under pressure to resign for weeks as the market crisis threatened to spin out of control.
Talks with Italian political parties are expected to begin Sunday morning with hopes that a new government can be in place in time for the opening of financial markets on Monday morning.