Luigi Di Maio, Italy's foreign minister, has stepped down as leader of the populist Five-Star Movement.
Speaking to supporters in Rome, Di Maio said that "an era had ended" and the movement needed to be "refounded".
Five-Star has been in crisis for months, especially since they went into government with the centre-left Democratic Party.
It had previously ruled in coalition with the right-wing League party.
But even earlier, it was beset by infighting and has seen the defections or expulsions of 31 MPs since the party won 33% of the vote in the 2018 election.
It was the Five-Stars' biggest victory nationally since its birth as a grassroots, anti-establishment protest movement led by comic Beppe Grillo.
Analysts have long said the party has struggled to pivot into an effective governing force, hobbled by its uneasy governing alliances first with League and, since September, with the Democratic Party. In the process, it has alienated voters by defying some of its core values.
The conflict came to a head a few days before a regional election this weekend that is likely to see Matteo Salvini’s League party score well in the traditional leftist stronghold of Emilia Romagna.
Latest polls showed the League and the Democratic Party candidate running close.
Analyst Massimiliano Panarari, writing Wednesday in the La Stampa newspaper, said a decision by Di Maio to step aside now as party leader would spare him blame should the candidate closest to the ruling coalition, Democrat Stefano Bonaccini, lose.
Panarari said Di Maio is the “natural scapegoat," because he has collected so many jobs — deputy premier, labour minister and minister of economic development in the first Five-Star government, and now foreign minister.
The Five-Stars' support has now shrunk to polling nationally only around 15-16%.
Premier Giuseppe Conte said he respected Di Maio's decision while dismissing suggestions that his resignation as party leader could destabilize the government.
“Certainly, I would be sorry on a personal level," he told RTL102 radio.