ROME: Italy Silvio Berlusconi on Monday sought backing from his party for a contested bid to bring down the government, as political instability hit the recession-hit economy on the financial markets.
Berlusconi explained to members of his People of Freedom party, which has reverted to its old name of Forza Italia (Go Italy), the reasons why on Saturday he withdrew his support for the cabinet.
"I took the decision on my own in the night because Italians could not understand why we were in government with the left," the 77-year-old was quoted as saying at a party meeting.
"We have to remain united. We wash our dirty linen at home," he was quoted by participants as saying. "We have to explain our reasons to our citizens"
Italian share prices meanwhile fell and borrowing costs rose as the recession-hit country braced for a showdown between Prime Minister Enrico Letta and the flamboyant billionaire tycoon Berlusconi.
Stocks closed down 1.2 percent, while the rate of return demanded by investors on 10-year government bonds were up at 4.520 percent from 4.416 percent on Friday an indication of investor concern.
After weeks of bickering, Berlusconi said he was pulling his party's five ministers out of the fragile coalition government with the left and called for elections as soon as possible.
But the outgoing ministers, while toeing the party line by resigning, have tried to distance themselves from Berlusconi, who has dominated Italian politics for much of the past 20 years.
"How long will the blind and absolute obedience to the leader last this time? Berlusconi's world has never been in such disagreement with Berlusconi," the La Stampa daily said in an editorial.
Letta, a moderate leftist who only came to power this year and has struggled to boost a flagging economy, accused the three-time former prime minister of a "crazy and irresponsible" act.
The 47-year-old Letta has warned against elections at a sensitive time for Italy on the financial markets and just as the economy was hoping to shake off two years of a devastating recession.
He is hoping that members of Berlusconi's party will rebel against their weakened leader by staying in government and voting to support it in a parliamentary confidence vote on Wednesday.
Analysts also played down the prospect of an imminent collapse of the government, which has sent jitters throughout the eurozone.
"We have to recognise that the risk of early elections is not insignificant but we think Berlusconi's gamble will not work in the end," said Matteo Cominetta, an analyst for HSBC bank.
London-based consultancy Capital Economics said: "Berlusconi's decision to withdraw his support for the coalition government may not trigger elections. But the fragile political situation highlights the huge challenges that Italy faces."
Fitch Ratings agency warned the uncertainty risked affecting Italy's fiscal policy targets and upsetting the timetable for approval of next year's budget which was due to be finalised now.
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