Italy's Prime Minister-designate Giuseppe Conte has abandoned efforts to form a government after the country's president Sergio Mattarella rejected his choice of economy minister.
The comments were read out following a Sunday evening meeting between Conte and Mattarella.
The two politicians met to discuss the list of cabinet candidates the would-be coalition partners, the far-right League and the anti-establishment 5-Star Movement, were proposing.
Conte, a political novice, was appointed on Wednesday in an attempt to end 11 weeks of political stalemate since Italy's March 4 general elections.
Earlier on Sunday, a source said Mattarella had rejected the name of Paolo Savona, the eurosceptic candidate whom the League/5-Star coalition had put forward to head the Economy Ministry.
Savona, 81, is an economist who has previously been a vocal critic of the euro and the European Union.
"As you have already heard, I have rejected the mandate to form a government that had been offered to me by President Mattarella," Conte said after the meeting.
He went on to thank Mattarella and said he had fully applied himself to the task at hand.
The president responded that he had accepted all proposals except that of the economy minister.
"No-one can claim that I have stood in the way of the formation of the so-called government for change," Mattarella said.
He said he would wait before calling a new round of elections in Italy.
In reaction to the news, 5-Star leader Luigi Di Maio said the president should be impeached by parliament for betraying the constitution.
In a video posted on Facebook, he called the decision an attack on democracy.
“What’s the point in voting, if in the end the government is decided by rating agencies and financial lobbies,” he said.