Italy’s Prime Minister Enrico Letta has won a confidence vote after a last-minute U-turn by former PM Silvio Berlusconi.
Silvio Berlusconi had initially promised to topple the government by withdrawing his party’s support – a move which prompted the Senate vote.
But he backed down when it became clear that several of his senators would back the government.
Enrico Letta had earlier said that if he were defeated in the vote, it might prove a “fatal risk” for Italy.
In the event he won easily: the Senate voted 235 to 70 in favor of the government.
Some of Silvio Berlusconi’s most hardline followers left the chamber and did not vote at all.
The result of the vote increases the possibility of Silvio Berlusconi being thrown out of the Senate on the grounds he is a convicted criminal.
On Friday a Senate committee is due to vote on whether to strip him of his seat following his conviction for tax fraud.
As he left the Senate building on Wednesday, people outside greeted him with catcalls, whistles and cries of “go away”.
Last weekend, Silvio Berlusconi demanded that five ministers from his centre-right People of Freedom party (PDL) leave the government and bring it down.
But Silvio Berlusconi’s close ally Renato Schifani insisted he had not been weakened by the vote, telling Italian news agencies that his leadership “has been strengthened”.
When he rose to speak in the Senate to announce his turnaround, Silvio Berlusconi said: “Italy needs a government that can produce structural and institutional reforms. We have decided, not without internal travail, to back the confidence vote.”
The Milan stock exchange gained nearly 2% on the announcement.
In his address to the Senate, Enrico Letta defended his government’s performance and said Italy “runs a risk, a fatal risk” if it were to fall.
He said: “Give us your confidence to realize [our] objectives. Give us your confidence for all that has been accomplished… a confidence vote for Italy and Italians.”
Silvio Berlusconi had accused Enrico Letta of allowing his “political assassination through judicial means” – a reference to Berlusconi’s criminal conviction for tax fraud in August.
The former prime minister said he asked his ministers to defy the government to protest against an impending rise in VAT, not because of the attempts to throw him out of the Senate.
Enrico Letta accused Silvio Berlusconi of using the VAT issue as an “alibi” for his own personal concerns.
He refused to accept the resignation of the five PDL ministers and hence called the vote of confidence.
Silvio Berlusconi’s plan to bring the government down began to unravel when the ministers signaled their own unwillingness to leave the government, and even his deputy and party secretary, Angelino Alfano, said that PDL members should back Enrico Letta.
Analysts say the crisis threatened to hamper badly needed reforms to tackle Italy’s economic problems that include debt, recession and high youth unemployment.
Enrico Letta’s cross-party alliance was formed in April after two months of political deadlock following an inconclusive election.