Italian President Giorgio Napolitano will start consultations with parties on Sunday to form a new government after Prime Minister Silvio Berlusconi resigned on Saturday night.

"President of the Italian Republic, Giorgio Napolitano, has received today at 21.00 at the Quirinale Palace the President of the Council of Ministers, Mr Silvio Berlusconi, who after completing the parliamentary process of examination and approval of the stability law and of the State forecast budget law has resigned from the cabinet he headed," said a statement published Saturday on the president's palace website.

"The Head of State's consultations will take place during tomorrow," the statement also said.

Berlusconi had promised on Tuesday to formally resign once a package of austerity measures asked by the European Union to rebuild Italy's credibility in the international markets and ward off a dramatic debt-driven crisis were passed by both the parliament's houses.

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