Berlusconi's coalition partner calls on him to resign

Umberto Bossi, the head of the Italian coalition government party the Northern League, has called publicly for prime minister Silvio Berlusconi to resign.

Ahead of a crunch parliamentary vote on Italy’s public finances today, the call from Berlusconi’s coalition partner reinforces how far support for the PM has evaporated.

"We asked the prime minister to stand down," Bossi told reporters on the margins of parliament ahead of a closely watched vote later on Tuesday. Bossi met with Berlsusconi late on Monday.

The Northern League leader said Berlusconi should be replaced by the secretary of his ruling People of Freedom party, Angelino Alfano.

Berlusconi remains defiant, saying he will survive the vote scheduled for 3pm today, and then table a confidence motion on vital economic reforms, despite the mounting threats against him.

Rome has displaced Athens as the epicentre of the Eurozone's sovereign debt crisis, with government bond yields nearing unsustainable levels that could force the bloc's third largest economy to seek a bailout that Europe cannot afford.

Italian 10-year borrowing costs have touched a new record of 6.71 per cent, raising the risk that Rome's massive debt – the second highest in Europe at 120 per cent of gross domestic product – could spiral out of control.

"Now we are really reaching very dangerous levels ... We are above yield levels in the 10-year where Portugal and Greece and Ireland issued their last bonds," said Alessandro Giansanti, a rate strategist at ING.