Italian Prime Minister Romano Prodi's government was "inclined to" present its resignation to the president after a major defeat in a Senate vote on foreign policy on Wednesday, a centre-left political source said.
"Prodi has called a cabinet meeting. (They are) inclined to present their resignation to the head of state who will then decide," the source said.
Divided over the Afghan war and ties with the US military, Prodi's centre-left government was unable to secure enough votes for a parliamentary motion backing Rome's foreign policy.
There is no constitutional requirement for Prodi to step down. But Foreign Minister Massimo D'Alema had said before the Senate vote that the centre-left government should resign if it did not command majority support on foreign policy.
The motion, a broadly worded declaration of support for foreign policy, received 158 votes in favour, below the necessary majority of 160 votes, and was followed by a chorus of opposition calls for the government to "quit, quit, quit".
Italy's ruling coalition has only a one-seat majority in the Senate but in the past had managed to muster support by calling confidence votes.
If Prodi's government resigned, President Giorgio Napolitano, the supreme arbiter of Italian politics, would decide whether to accept the resignation.
Dissolving parliament and calling an election is a radical option, and Napolitano could take less dramatic steps including asking Prodi to test his majority with a confidence vote.
He could also ask Prodi to form a new government or broker the formation of a different government.
Renato Schifani, Senate leader of the biggest opposition party, Forza Italia, held up a copy of Wednesday's La Stampa newspaper which had quoted D'Alema's warning to coalition pacifists who oppose Italy's military presence in Afghanistan.
"I have in my hand one of the most important newspapers in the country with a declaration by Foreign Minister D'Alema: 'Resignation if we have no majority'," Schifani said to cheers from allies.
"There is no majority any more ... There is no Prodi government any more. The Prodi government has fallen in this chamber."
The defeat was the most serious setback for Prodi's nine-month-old coalition government, also deeply divided over a host of domestic issues ranging from the budget, pension reform and a bill giving legal recognition to gay and unwed couples.
D'alema or everyone?
A political source in the Catholics-to-communists ruling coalition expected Prodi to survive the ordeal but said D'Alema, who is also deputy prime minister, would likely resign as foreign minister.
"It's a given that the foreign minister will quit," the government source said. He said he expected Prodi to call a confidence vote with the hope of forcing his divided coalition to join ranks to avoid collapse.
But a colleague from D'Alema's Democrats of the Left, the largest coalition party, said that if D'Alema resigned, the whole government would have to follow suit.
"D'Alema's not out on his own," said Parliamentary Relations Minister Vannino Chiti. "A government that has no cohesive, self-sufficient majority has to go, not just the foreign minister."
Beyond Afghanistan, where Italy has 1,900 troops on a NATO-led mission, one of the most divisive issues has been a plan to expand a US military base in northern Italy.
Protests against the plan drew tens of thousands of Italians, including some senior coalition members, last weekend.
D'Alema said the government was compelled to allow the base expansion. "Revoking the authorisation would have been a hostile act on our part against the United States," he said.
But one leftist senator announced he would resign rather than vote for D'Alema's motion. "I am against the war in Afghanistan and against the US base in Vicenza," said Franco Turigliatto, with the Communist Refoundation party.