President Giorgio Napolitano summoned Italy's parliamentary speakers on Tuesday and looked set to dissolve parliament and call new elections after attempts to form an interim government failed.
If he dissolves parliament as expected by Wednesday, it will pave the way for elections eagerly awaited by the likely victors, the centre-right led by media magnate Silvio Berlusconi. The polls could be held as early as April 6-7 but more likely on April 13-14.
With elections a foregone conclusion, campaign fever is already in the air. Although voter surveys suggest that Berlusconi's forces will return to power for a third time in April's elections, he will face a new foe in the form of popular 52-year-old Rome Mayor Walter Veltroni, the new flagbearer of the left.
It makes a change from the duels voters have already witnessed four times between the flamboyant Berlusconi, 71, and his professorial arch-rival Romano Prodi, both of them now former prime ministers twice over.
With 68-year-old Prodi's political star on the wane, the centre-left has been grooming Veltroni to succeed him. Italy's political crisis came to a head on Monday as Senate Speaker Franco Marini threw in the towel after failing to form an interim government.
The support of Berlusconi for an interim government tasked solely with shepherding electoral reforms through parliament was key. But the billionaire media magnate, who heads the largest party on the right, Forza Italia, insisted that only early elections could end the political crisis sparked by the collapse of Prodi's centre-left government last month. The centre-left, in disarray since Prodi's demise was triggered by the defection of a tiny party near the centre, understandably pushed for electoral reforms.
Under current law, voting is entirely by proportional representation, and the April 2006 elections saw 22 parties win seats in parliament, with most of the tiniest on the left, resulting in Prodi's unstable coalition.
The system was pushed through parliament by Berlusconi's right-wing government in 2005 with the aim of limiting the extent of the centre-right's eventual defeat the following year. On Saturday, trade unions and employers joined calls for changing the voting system.