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. Last Updated: 07/27/2016

Berlusconi Resigns, Backs New Election

ROME -- Premier Silvio Berlusconi, the media magnate who bulldozed into politics, resigned Thursday after rebellious allies and a corruption probe tore apart his 7-month-old government.

The collapse of the government comes a year after Berlusconi launched a conservative political movement to replace the scandal-ridden parties who led Italy since World War II.

Berlusconi submitted his resignation to President Oscar Luigi Scalfaro, who now must decide how to head toward Italy's 54th government since 1945.

Berlusconi supports immediate elections. But Scalfaro instead asked Berlusconi to stay on as caretaker leader, the president's office said.

"I feel light," Berlusconi said after the meeting. "A weight has been taken off."

Scalfaro has scheduled consultations to begin Friday on prospects to form a new government, either under Berlusconi or a new premier. If no agreement can be reached, Scalfaro could be forced to call elections.

The conservative three-party coalition of Berlusconi was troubled by internal quarrels from the beginning. But pressure on Berlusconi sharply increased last month after anti-graft prosecutors placed him under investigation in a bribery probe of his media and retail empire. Then his key ally, Umberto Bossi of the Northern League, linked up with opponents and pushed no-confidence motions.

Besides helping to bring down the government, Bossi's rebellion splintered his own party. A top Northern League official, Roberto Maroni, said Thursday he was forming his own breakaway faction that could pull in a large segment of the party, which endorses redistributing more political clout to regions.

The political turmoil has plunged the lira into a tailspin, hitting record lows against the German mark and slumping badly against the dollar. The lira rebounded slightly after Berlusconi's resignation, but traders expected no major boosts until a new government is formed.

"It's no longer possible to accept compromises," Berlusconi said before heading for the meeting with Scalfaro.

Debate over the fate of Berlusconi's government was immediately suspended after the premier said he was going to see the president.

Berlusconi is counting on voters to again back his Forza Italia party and to overlook attacks by opponents, and the bribery probe of his company, Fininvest SpA. Berlusconi, who has denied any wrongdoing, was questioned last week. Prosecutors must now decide whether to issue an indictment.

"If this majority breaks apart, it is necessary to decisively and calmly ask the opinion of voters," Berlusconi told the lower chamber of parliament in a speech Wednesday to open a marathon series of speeches on the political chaos.

Berlusconi was up against three no-confidence motions put forth by the Northern League and opposition parties.

Berlusconi entered politics a year ago after corruption scandals destroyed the political elite that governed Italy since World War II. He joined with Bossi's party and the National Alliance to dominate March parliamentary elections.