President Mattarella has told the prime minister to go back to parliament after Mario Draghi offered to quit, arguing his national unity coalition "no longer exists".
Italian President Sergio Mattarella has rejected the resignation of Prime Minister Mario Draghi, the presidency said on Thursday night.
Earlier in the evening Draghi said he would tender his resignation on Thursday night, saying his coalition government had collapsed.
"The President of the Republic has not accepted the resignation of the President of the Council and has invited him to come to parliament (...) so that an assessment of the situation can be made," the presidency's statement said.
The rejection of the tendered resignation left in limbo the future of Draghi's 17-month-old government, its survival sorely tested by increasingly sharp divergences within the coalition.
The premier won a confidence vote in the Senate earlier in the day, but the populist 5-Star Movement (M5S) boycotted the vote, throwing his coalition into crisis.
The vote was 172-39, but 5-Star senators were absent after confirming they would not participate in the vote on a relief bill for soaring energy costs.
"I will tender my resignation to the president of the republic this evening," Draghi told the cabinet, according to a statement released by his office.
"The national unity coalition that backed this government no longer exists," he added.
But President Mattarella told Draghi to instead go back to Parliament and see if he can still garner solid support, the palace statement said.
Had Draghi's resignation been accepted, it could have set the stage for an election as early as September.
The confidence vote had become a focal point for tensions within Draghi's government as its parties prepare to fight each other in a national election due by early 2023.
The decision by the 5-Star party to boycott the confidence vote on Thursday had plunged Italy into political uncertainty.
It risked undermining efforts to secure billions of euros in European Union funds, tackle a damaging drought and reduce its reliance on Russian gas.
Draghi raised the stakes by saying he would not want to lead a government without 5-Star.
Theoretically he has a majority to govern even without the populist movement, but the former European Central Bank chief had said on several occasions that there would be no government without them.
Draghi's broad government of "national unity" was formed in February 2021 with parties on both right and left to help Italy recover from the COVID-19 pandemic and the ensuing economic crisis. But without the support of M5S, he argues that his government would become "political" and he has no mandate to lead such a cabinet.
"Since my inauguration speech to parliament I have always said that this government would have continued only if it had a clear perspective of achieving the government programme on which the political forces had voted confidence," Draghi told ministers on Thursday, reaffirming this position. "These conditions no longer exist today."
5-Star emerged as the largest party in the previous election in 2018. But they have since suffered defections and a loss of public support.