Rome: Italian Prime Minister Silvio Berlusconi, under huge pressure from international markets and rebels in his party, tried to play his last cards on Monday to hang on to power and denied reports that he could resign within hours.
Reports of a possible resignation had an immediate impact, boosting stock and government bond markets dismayed with the political disarray in Italy, which has dramatically worsened the euro zone debt crisis.
But a denial by Berlusconi reversed the direction, indicating just how much markets would like to see him depart.
Earlier, Giuliano Ferrara, editor of the Foglio newspaper and a former minister seen as extremely close to Berlusconi, said on his website: "That Silvio Berlusconi is about to resign is clear. It is a question of hours, some say of minutes."
Franco Bechis, deputy editor of the center-right Libero newspaper, also said on Twitter that the 75-year-old media magnate would resign on Monday night or Tuesday morning.
But Berlusconi said on his Facebook page: "Rumors of my resignation are baseless."
Earlier on Monday, benchmark government bond yields rose to their highest since 1997 at 6.67 percent. Many analysts say yields above 7 percent would make funding costs unsustainable for Italy`s huge public debt, one of the highest in the world.
Berlusconi was making a private visit to Milan for a lunch with his children. As recently as Sunday he vowed to stay in power and denied that a party rebellion had robbed him of a workable majority.
Political sources said a late Sunday meeting of leaders of his PDL party had urged him to resign but he was not convinced.
He and his closest aides spent the weekend trying to win back the support of enough deputies to avoid humiliating defeat on Tuesday in a vote to confirm a state financing bill which he has already lost once.