REPORTING FROM ROME -- After losing support among a majority of lawmakers on a crucial vote Tuesday, Silvio Berlusconi agreed to step down as Italy's prime minister when Parliament passes economic reforms demanded by European leaders who are trying to contain the region's debt crisis.
The announcement came in a statement from Italian President Giorgio Napolitano, who met with Berlusconi following the budget vote in the Parliament's lower chamber earlier in the day. The measure passed the lower house with 308 votes, but 321 lawmakers abstained.
The vote on the reform package had been expected to be held next week, but the timing was left unclear by Tuesday's developments.
Berlusconi's failure to carry the full majority was the latest sign that support for him has waned among his coalition.
“The prime minister expressed to the president of the republic his awareness of the implications of the results of today's vote," Napolitano's statement read.
Berlusconi "also expressed deep concern about the urgent need to give precise answers to the European partners with the approval of the [reform package]," it said.
The 75-year-old billionaire has faced mounting calls to resign as financial markets and European leaders have lost confidence in his government's ability to implement structural reforms that analysts say are needed to turn around the heavily indebted nation and avoid following the fate of Greece and other countries that have needed bailouts.
Before Tuesday's vote, Berlusconi's closest coalition ally, Umberto Bossi, told reporters the prime minister should be replaced by Angelino Alfano, secretary of the ruling People of Freedom party.
On Monday, as it became apparent that he had lost a needed majority in Parliament, Berlusconi denied that he would resign. But Italian media reports Tuesday indicated that he would make a decision after seeing the results.
Italy's bond yields inched higher Tuesday, effectively raising the cost of borrowing and adding mounting pressures on the government to institute changes.
-- Don Lee and Livia Borghese
Photo: Italian Prime Minister Silvio Berlusconi waves to journalists as he leaves the Quirinale presidential palace in Rome after meeting with President Giorgio Napolitano on Tuesday. Credit: Andrew Medichini / Associated Press