The Italian Prime Minister Romano Prodi has handed in his resignation after a major defeat in the senate in a debate over foreign policy.
The President Giorgio Napolitano is now to hold talks with political leaders about the country’s political future.
The fragile coalition split over the issue of Italian troops in Afghanistan and plans to expand a US airbase in northern Italy.
And that led to loud calls in the Senate for the government to resign.
The Foreign Minister had said earlier that were the government to lose the vote, it should step down, even though it was not strictly speaking a vote of confidence.
Massimo d’Alema argued in the debate that Italy should maintain its contribution to the international military effort in Afghanistan, contrary to the stance of his left wing colleagues, and the Greens.
Prodi also wanted to approve the expansion of an American military base in the northern city of Vicenza, something the radical left, and many members of the public, also oppose.