Italy President Napolitano meets PM Letta for crisis talks
Italy's president has begun crisis talks with Prime Minister Enrico Letta after ex-PM Silvio Berlusconi pulled his ministers out of the government.
Giorgio Napolitano said he would try to oversee the formation of a new coalition without calling elections.
This follows weeks of worsening ties between Berlusconi's party and Mr Letta's centre-left grouping.
Berlusconi had already threatened to withdraw his ministers if he was expelled from the Senate for tax fraud.
The current coalition government was put together after inconclusive elections in February, and the latest developments cast a further shadow over Italy's struggling economy, the eurozone's third-largest.
It is feared that the crisis could hamper efforts to enact badly-needed reforms to tackle Italy's economic problems, including debt, recession and high youth unemployment.
The International Monetary Fund has warned that coalition tensions represent a risk to the Italian economy.
Speaking ahead of Sunday evening's talks, President Napolitano said he would first try to mediate to keep the current parliament alive, because it was his constitutional duty.
"The President of the republic dissolves the parliament only in case there is no chance of finding a majority and therefore a new government in the interest of the country."
On Saturday he said Italy needed a parliament that worked, "not that breaks up every now and then".
Italy is now in very uncertain political terrain, and at times like this its head of state becomes a hugely important figure, the BBC's Alan Johnston in Rome reports.
The prime minister arrived for the talks at the presidential palace at around 19:00 (17:00 GMT).
Mr Letta, of the centre-left Democratic Party, warned late on Friday that he would quit unless his coalition cabinet won a confidence vote due next week.
But Berlusconi pre-empted that, describing Mr Letta's comments as "unacceptable". He later said all five ministers of his People of Freedom (PDL) party were resigning.
The PDL is objecting to a planned increase in sales tax, which is part of wider government policy to reduce big public debts.
However, most of the five ministers appeared to challenge the former prime minister's order to leave the coalition.
"I thoroughly understand his state of mind, but I cannot justify or share the strategy," said health minister Beatrice Lorenzin. Reforms minister Gaetano Quagliarello and transport minister Maurizio Lupi also appeared reluctant to pull out of the cabinet.
"We want to stay with Berlusconi but not his poor advisers," Mr Lupi said.
Enrico Letta had responded angrily to Saturday's resignations, accusing the PDL leader of telling Italians a "huge lie" in using the sales tax as an "alibi" for his own personal concerns.
"In parliament, everyone will have to assume responsibility for their actions before the nation."
Berlusconi's legal problems are seen as a cause of much of the tension inside the coalition.
A committee of the Senate decides next week if he should be expelled after the Supreme Court recently upheld his conviction for tax fraud.
It was his first conviction to be confirmed on appeal in two decades of fighting legal cases.
Berlusconi was sentenced to a year in jail, but is expected to serve house arrest or community service because of his age.