Obama has called Renzi to thank him for ‘close partnership’

He will stay in a caretaker’s role at the request of Italy’s president until a new government can be formed.

Now when the constitutional reforms are rejected, the country is likely to retain a system where parties other than in majority also have a say in the governing process, such that the coalition government is hardly able to legislate radical reforms.

A statement from the Quirinal palace confirmed that Mr Renzi had told the president it was not possible for him to continue in his post following the defeat on Sunday of a constitutional referendum championed by Mr Renzi.

After the vote, Mr Renzi announced his resignation, opening the door wider to the rise of the populist anti-euro, right-wing Five Star Movement.

It could be clear whom Mattarella might tap to be the next premier once those meetings are done.

Voting with two different laws is widely seen as a recipe for continued political instability in a country that has seen 63 governments in 70 years.

The government has already won a vote of confidence on the budget in the lower house of parliament, but needs the senate’s nod when it votes on it on Wednesday.

“Democracy was the victor”, Grillo wrote in a post-vote blog that marked a significant change in the party’s position on the electoral law. Opposition parties, including the anti-euro 5-Star Movement, are pressing for the elections to be held soon.

“We face commitments and deadlines that institutions will need to respect in any case, providing answers adequate to the current problems”, it said.

According to a source quoted in Italy, President Mattarella believes it is “inconceivable” that elections can be held before the electoral laws governing both houses of parliament are synchronised.

Some opposition forces have called for immediate elections, but this option appeared very unlikely. Renzi’s squabbling Democrats are the biggest party in the legislature, which could lead the president to tap someone from the Democratic Party fold. “We saw them at the (2014) European elections (when his Democratic Party polled 41%), we saw them in (Sunday’s) referendum, we’ll see them in the future”.

Referencing the clamour for early elections, he said: “We are not afraid of anything or anybody, if other parties want to go to the polls. the PD is not afraid of democracy or elections”.

The statement referred to the Budget Law, an important issue for Mattarella, and to two worldwide appointments – the celebrations of the 60th anniversary of the Treaty of Rome that founded Europe and the G7 summit in Taormina at the end of May.

The law created a run-off system between national candidates that awards the victor a bonus of seats in the Lower House of Parliament.

Underscoring the financial risks that heavily indebted Italy faces, Moody’s changed its outlook on the country’s bond rating to negative from stable, saying prospects for much-needed economic reform had shrunk after Italians rejected Renzi’s proposals to revise the constitution and streamline parliament.

Opposition parties had denounced the proposed amendments to the 68-year-old constitution as unsafe for democracy because they would have removed important checks and balances on executive power.

For Italians who keep insisting they are hungry for change, Monday’s vote had the effect of ushering in an Italian Groundhog Day.

Renzi will address his Democratic Party later Wednesday.