Rome: Italian Prime Minister Silvio Berlusconi is expected to resign on Saturday, making way for an emergency government and ending one of the most scandal-plagued eras in Italy`s post-war history.
The Chamber of Deputies was due to start a debate at 1130 GMT (6:30 am EST) on a package of economic reforms intended to reverse a collapse of market confidence.
The definitive approval of the package by the lower house will mark the final act of the Berlusconi government. He is expected to hold a last cabinet meeting and then go to the Quirinale Palace and hand his resignation to President Giorgio Napolitano.
His resignation will trigger a series of events over the weekend and most likely conclude on Sunday night or Monday morning with the formation of new government headed by former European Commissioner Mario Monti.
Monti, currently head of the prestigious Bocconi University in Milan, is expected to head a largely technocratic government to push through reforms in an effort to head off a perilous crisis.
Napolitano and Italian legislators have put the process on a fast track, prompting healthy reactions from the stock and bond markets.
Italian bond yields, which shot way above sustainable levels earlier this week, fell sharply in response to acceleration of the process leading to Berlusconi`s resignation and the approval of the reforms.
Global markets panicked earlier this week because of the sustained political turmoil in the euro zone`s third largest economy, and Italy`s borrowing costs shot above a "red line" of 7 percent -- the level at which Portugal and Ireland had to seek an international bailout.
European leaders support Italy President
Napolitano has received encouragement from various European heads of state, including French President Nicolas Sarkozy and German President Christian Wulff.
In telephone calls on Friday, all three agreed that the new measures must be enacted quickly because the situation in Italy was extremely worrying for all of Europe and particularly the euro zone.
Monti, a highly respected international economist, has been favored by markets for weeks to lead Italy out of the crisis.
But although he would be supported by most centrists and the biggest opposition force, the Democratic Party, there is substantial opposition in Berlusconi`s existing coalition.
Berlusconi has dominated the Italian scene since 1994 and has led three governments in 17 years.
After making a fortune in property and media, Berlusconi created his own party almost overnight to fill the void on the center-right caused by the demise of the Christian Democratic party in the corruption scandals in the early 1990s.
His third and last stint in power, which began in 2008 when his center-right won the national elections, has been the most scandal plagued.
His second wife left him 2009, accusing him of frequenting minors.
He leaves office facing four separate trials for fraud and having sex with a minor.
For much of this year, Italian newspapers have been filled with lurid details of "bunga-bunga" parties with young women at his luxurious residences in Rome, Milan and Sardinia.
One leaked wiretap had him boasting of having sex with eight women in one night and being so occupied with starlets that he was only prime minister "in my spare time."