Threatened with constant sniping from a resurgent Silvio Berlusconi, Italian Prime Minister Mario Monti has called it quits: he will resign by Christmas, in a move that fuelled speculation he might take on his rival in a looming election campaign.
Berlusconi, who made way for Monti last year, confirmed Saturday he would again lead Italy's conservatives into next year's elections. Two days earlier, his People of Freedom (PDL) party pulled out of the ruling coalition, but stopped short of bringing down the government.
"I was deeply outraged" at the PDL saying it would abstain on all government measures in parliament except for the 2013 budget, Monti was quoted as saying Sunday by leading Italian newspaper, Corriere della Sera.
Whereas Monti, a non-partisan economist, has won international praise for getting to grips with Italy's debt problems and passing unpopular pension and labour reforms, PDL secretary Angelino Alfano blamed him for a worsening recession and spiking unemployment.
"Immediately after" the parliamentary approval of the budget - likely within the next week - Monti "will hand over his final resignation," read a statement from Italian President Giorgio Napolitano Saturday, coming after crisis talks with the premier.
The latest development left Italy heading for general elections in February. They had, until now, been expected in March or April.
Most commentators were expecting Berlusconi, whose party is trailing badly in the polls, to lead an anti-Monti, anti-austerity campaign.
"He resigns. Finally," was the front page headline Sunday on the Berlusconi-owned newspaper Il Giornale. Libero, another pro-Berlusconi daily, said the media mogul-turned politician was planning to fill his party lists with "fresh faces."
These would include former AC Milan footballers Paolo Maldini and Franco Baresi - keeping in line with a Berlusconi tradition to recruit unconventional politicians. In his last government, Mara Carfagna, a former Miss Italy contestant, was appointed minister.
"I am running to win," the maverick politician said Saturday, speaking from the training grounds of AC Milan, which he owns.
The three-time prime minister, 76, will be running for high office for the sixth time, contravening an October pledge to let the PDL select a new leader. He said he was doing it "in desperation" and "out of responsibility" because there was no suitable successor.
The 41-year-old Alfano had been expected to take over.
"Poor guy, his leadership never existed," PDL deputy and Berlusconi confidant Marcello Dell'Utri told the centre-left daily La Repubblica.
Democratic Party (PD) leader Pier Luigi Bersani is, so far, the clear front-runner in the election campaign. But pollster Renato Mannheimer wrote on Il Sole 24 Ore daily that Bersani's centre-left coalition might not win a majority in the upper house of parliament.
The outcome will hinge on Lombardy, Mannheimer said, referring to the Berlusconi heartland where the former premier could regain ground by renewing an alliance with the Northern League, an anti-Monti regional party and former coalition partner.
Bersani could also be denied victory by the anti-establishment Five Star Movement of comedian Beppe Grillo, which is second in the polls after the PD, but ahead of the PDL, or be forced into an alliance with a currently disorganised array of centrist parties.
That could change if Monti were to break out of his impartiality and lead that grouping, which has already stated it wants him to remain premier. A minority of PDL politicians who have criticised Berlusconi's break with the government could join in.
Former foreign minister Franco Frattini is among them. Adding further uncertainty to the scenario, Corriere della Sera speculated that Berlusconi might once again change his mind and back out of his prime ministerial bid if he fails to resurrect the PDL's poll standings by next month.
Commentators expressed concern that, if Berlusconi were to focus on promises to reverse Monti's austerity reforms, Italy would once again be exposed to attacks from the markets.
After Berlusconi's comeback was announced this week, risk indicators on the country's debt - the second-highest in the eurozone after Greece - rose markedly.