ROME Italian Prime Minister Mario Monti tendered his resignation to the president on Friday after 13 months in office, opening the way to a highly uncertain national election in February.
The former European commissioner, appointed to lead an unelected government to save Italy from financial crisis a year ago, has kept his own political plans a closely guarded secret but he has faced growing pressure to seek a second term.
President Giorgio Napolitano is expected to dissolve parliament in the next few days and has already indicated that the most likely date for the election is February 24.
In an unexpected move, Napolitano said he would hold consultations with political leaders from all the main parties on Saturday to discuss the next steps. In the meantime Monti will continue in a caretaker capacity.
European leaders including German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso have called for Monti's economic reform agenda to continue but Italy's two main parties have said he should stay out of the race.
Monti, who handed in his resignation during a brief meeting at the presidential palace shortly after parliament approved his government's 2013 budget, will hold a news conference on Sunday at which he is expected clarify his intentions.
Ordinary Italians are weary of repeated tax hikes and spending cuts and opinion polls offer little evidence that they are ready to give Monti a second term. A survey this week showed 61 percent saying he should not stand.
Whether he runs or not, his legacy will loom over an election which will be fought out over the painful measures he has introduced to try to rein in Italy's huge public debt and revive its stagnant economy.
His resignation came a couple of months before the end of his term, after his technocrat government lost the support of Silvio Berlusconi's centre-right People of Freedom (PDL) party in parliament earlier this month.
Speculation is swirling over Monti's next moves. These could include outlining policy recommendations, endorsing a centrist alliance committed to his reform agenda or even standing as a candidate in the election himself.
The centre-left Democratic Party (PD) has held a strong lead in the polls for months but a centrist alliance led by Monti could gain enough support in the Senate to force the PD to seek a coalition deal which could help shape the economic agenda.
BERLUSCONI IN WINGS
Senior figures from the alliance, including both the UDC party, which is close to the Roman Catholic Church, and a new group founded by Ferrari sports car chairman Luca di Montezemolo, have been hoping to gain Monti's backing.
He has not said clearly whether he intends to run, but he has dropped heavy hints he will continue to push a reform agenda that has the backing of both Italy's business community and its European partners.
The PD has promised to stick to the deficit reduction targets Monti has agreed with the European Union and says it will maintain the broad course he has set while putting more emphasis on reviving growth.
Berlusconi's return to the political arena has added to the already considerable uncertainty about the centre-right's intentions and increased the likelihood of a messy and potentially bitter election campaign.
The billionaire media tycoon has fluctuated between attacking the government's "Germano-centric" austerity policies and promising to stand aside if Monti agrees to lead the centre right, but now appears to have settled on an anti-Monti line.
He has pledged to cut taxes and scrap a hated housing tax which Monti imposed. He has also sounded a stridently anti-German line which has at times echoed the tone of the populist 5-Star Movement headed by maverick comic Beppe Grillo.
The PD and the PDL, both of which supported Monti's technocrat government in parliament, have made it clear they would not be happy if he ran against them and there have been foretastes of the kind of attacks he can expect.
Former centre-left prime minister Massimo D'Alema said in an interview last week that it would be "morally questionable" for Monti to run against the PD, which backed all of his reforms and which has pledged to maintain his pledges to European partners.
Berlusconi who has mounted an intensive media campaign in the past few days, echoed that criticism this week, saying Monti risked losing the credibility he has won over the past year and becoming a "little political figure".
(Additional reporting by Gavin Jones, Massimiliano Di Giorgio and Paolo Biondi; Writing by Gavin Jones and James Mackenzie; Editing by Michael Roddy)