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A new Italian government led by Matteo Renzi has been sworn in Rome ceremony.

Centre-left Matteo Renzi, 39, will be the youngest prime minister in Italy’s history, and one of its least experienced.

Matteo Renzi, nicknamed Il Rottamatore (the Scrapper) rose to prominence as the mayor of Florence, but has never been elected to parliament or served in a national government.

He has chosen a comparatively young cabinet team, about half of them women.

Unemployment in Italy currently stands at a nearly 13% – and above 40% among the young.

Matteo Renzi has promised to overhaul the jobs market and the tax and education systems within four months, but our correspondent adds that he leads an awkward coalition that will not make his task easy.

Matteo Renzi is the youngest prime minister in Italy's history, and one of its least experienced

Matteo Renzi is the youngest prime minister in Italy’s history, and one of its least experienced

The new prime minister has named the chief economist at the Paris-based Organization for Economic Co-operation and Development, Pier Carlo Padoan, as his finance minister.

Angelino Alfano, who heads the New Centre Right party, one of the Democratic Party’s coalition partners, remains as interior minister.

The government will have to win a vote of confidence in parliament, expected on Monday, before it starts work officially.

On Friday, Matteo Renzi formally accepted the mandate to lead a new government and named his cabinet.

Announcing his team, he said: “It’s a government that will start to work from tomorrow morning.”

The swearing-in took place on Saturday in the ornate presidential palace in Rome as the new prime minister and his cabinet – with the exception of Pier Carlo Padoan, who had not returned from Australia in time for the ceremony – took the oath of office from President Giorgio Napolitano.

Matteo Renzi ousted prime minister and party colleague Enrico Letta, who had led Italy for just 10 months, in a vote at a party meeting on February 13.

He argued that a change of government was needed to end “uncertainty”. He had accused Enrico Letta of a lack of action on improving the economic situation, with unemployment at its highest level in 40 years and the economy shrinking by 9% in seven years.

Matteo Renzi also accused Enrico Letta of failing to implement promised reforms of what is seen as an often corrupt and wasteful bureaucracy.

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Matteo Renzi is expected to be offered to become Italian prime minister, as talks begin on forming a new government.

Italy’s President Giorgio Napolitano is starting consultations following the resignation of Enrico Letta.

Enrico Letta was ousted in a vote called by Florence mayor Matteo Renzi at a meeting of their centre-left Democratic Party.

Matteo Renzi, 39, would become Italy’s youngest prime minister.

Enrico Letta was under increasing pressure over Italy’s poor economic performance.

After accepting the prime minister’s resignation, Giorgio Napolitano’s office said talks would begin with political leaders on finding a replacement.

Matteo Renzi is expected to be offered to become Italian prime minister, as talks begin on forming a new government

Matteo Renzi is expected to be offered to become Italian prime minister, as talks begin on forming a new government

The consultations would be conducted swiftly to find an “efficient solution” and they would conclude on Saturday, the statement added.

Enrico Letta’s position became untenable once the Democratic Party backed a call for a new administration.

Matteo Renzi had argued that a change of government was needed to end “uncertainty”.

A new government should take over until the end of the current parliamentary term in 2018, he said.

Matteo Renzi had accused Enrico Letta of a lack of action on improving the economic situation, with unemployment at its highest level in 40 years and the economy shrinking by 9% in seven years.

Enrico Letta, 47, was also accused of failing to implement promised reforms of what is seen as an often corrupt and wasteful bureaucracy.

Youth unemployment has risen and Italians have grown increasingly impatient of the slow pace of reform and the continuing decline of families’ income and living standards.

Enrico Letta only lasted 10 months in the post after forming a coalition government with the centre-right last year. The prime minister, who drove himself from the presidential palace after resigning, took to Twitter to thank “all those who have helped me”.

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Italy’s PM Enrico Letta has said he will resign on Friday after his Democratic Party backed a call for a new administration.

Party leader Matteo Renzi had earlier called for a change of government at a party meeting, saying the country could not go on in “uncertainty”.

Speculation has been rife that Matteo Renzi wants to take over as prime minister.

Matteo Renzi is eight years younger than Enrico Letta and was elected leader of the party in December.

Enrico Letta said in a statement that his decision followed “the decision taken today by the national leadership of the Democratic Party”.

He said he would formally submit his resignation to President Giorgio Napolitano at the presidential palace on Friday.

Enrico Letta has said he will resign on Friday after his Democratic Party backed a call for a new administration

Enrico Letta has said he will resign on Friday after his Democratic Party backed a call for a new administration

Matteo Renzi has previously accused Enrico Letta of a lack of action on improving the economy, with unemployment at its highest level in 40 years and the economy shrinking by 9% in seven years.

Correspondents say that although the prime minister has kept a careful lid on public expenditure, he has not been able to carry out much-needed administrative reforms and stimulate economic growth.

The latest political turmoil has so far had little impact on financial markets, in contrast with the volatility seen before the current coalition was formed.

Enrico Letta did not attend Thursday’s party meeting, which had been brought forward from next week.

At the meeting, Matteo Renzi thanked Enrico Letta for his “remarkable work” but said the country could not go on in “uncertainty”.

He said his proposal – a new government to take over until the end of the current parliamentary term in 2018 – was a way out of the “morass”.

Enrico Letta, 47, formed a coalition with the centre-right last year but there had been mounting speculation over his future after Matteo Renzi was elected party leader in December.

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Italy has decided to hold a state funeral for the hundreds of migrants who died after their boat capsized close to the island of Lampedusa last Thursday.

PM Enrico Letta made the announcement during a visit to the island with European Commission President Jose Manuel Barroso.

Jose Manuel Barroso pledged 30 million euros ($40 million) of EU funds to help refugees in Italy.

At least 274 people, mostly from Eritrea and Somalia, died in the wreck.

Of more than 500 people on board, only 155 have survived. Divers are recovering bodies.

It is one of Italy’s worst disasters involving a boat carrying Europe-bound migrants from Africa.

Lampedusa is a key destination for such boats and many residents have long complained that the authorities in Italy and the European Union are not doing enough to deal with the thousands of migrants who come ashore each year.

Jose Manuel Barroso and Enrico Letta visited the temporary mortuary holding the coffins of the victims and met survivors and those who had helped in the rescue.

The two men were heckled on their arrival in Lampedusa, with shouts of “disgrace” and “killers”.

Italy will hold a state funeral for the migrants who died after their boat capsized close to the island of Lampedusa

Italy will hold a state funeral for the migrants who died after their boat capsized close to the island of Lampedusa

Speaking at a joint news conference, Jose Manuel Barroso said he would never forget the sight of hundreds of coffins.

“It’s something, I think, one cannot forget: coffins of babies, coffins of a mother and a child that was born at that moment,” he said.

“This is something that profoundly shocked me.”

Jose Manuel Barroso said he also met survivors who had retained hope, and it was now the duty of the EU “to give reason for that hope”.

He said 30 million euros would help Italy to settle its refugees, and listed a range of measures the EU must undertake including focusing their efforts on the people smugglers and the countries where most of the migrants are coming from.

Jose Manuel Barroso also said the EU parliament would be voting on a plan to launch Mediterranean-wide search and rescue patrols to intercept migrant boats.

The European Commissioner for Home Affairs, Cecilia Malmstroem, said on Tuesday she had asked the EU’s Frontex border agency to draw up a “concrete proposal” for an operation that would allow better tracking, identification and rescue of migrant boats.

Frontex currently helps Italy to intercept migrant boats, but the two EU operations in the southern Mediterranean have limited resources – a total of four ships, two helicopters and two planes.

PM Enrico Letta said a great human drama was unfolding on Lampedusa and pledged to put the issue of migration at the centre of the EU agenda.

The two were met upon their arrival in Lampedusa by a small group of activists and local residents who shouted “shame”, “disgrace” and “killers” at the airport gates.

“They should be ashamed of themselves. They should solve this humanitarian problem,” one protester was quoted by Agence France-Presse news agency as saying.

The 66ft boat that sank last Thursday with more than 500 migrants on board had set off from Libya and was close to Lampedusa when, according to survivors, the engine failed.

In order to attract attention from passing boats, a small fire was lit which caused the passengers to panic and move towards one side of the boat which led to the capsizing, the survivors said.

Divers said they found dozens of bodies entwined together in the hull of the boat which lies about 155ft below the surface of the sea.

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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.

Enrico Letta has won a confidence vote after a last-minute U-turn by former PM Silvio Berlusconi

Enrico Letta has won a confidence vote after a last-minute U-turn by former PM Silvio Berlusconi

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.

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Italian PM Enrico Letta has been addressing parliament ahead of a crucial vote of confidence in his governing coalition.

Enrico Letta told the Senate the collapse of his government could be fatal for the country.

The vote was called after former PM Silvio Berlusconi ordered ministers in his centre-right People of Freedom party (PDL) to leave the government.

But some key PDL figures have defied him, saying they will back Enrico Letta.

Enrico Letta earlier rejected the resignations of the five PDL ministers.

Silvio Berlusconi has accused Enrico Letta of allowing his “political assassination through judicial means” – a reference to Berlusconi’s criminal conviction for tax fraud in August.

“Even though I understand the risks that I am taking on, I have decided to put an end to the Letta government,” Silvio Berlusconi said in a letter to the weekly magazine Tempi.

However, Silvio Berlusconi appeared more circumspect on arrival at the Senate on Wednesday, saying: “We’ll see what happens. We’ll listen to Letta’s speech and then we’ll decide.”

Addressing the Senate, Enrico Letta defended his government’s performance and said Italy “runs a risk, a fatal risk” if it were to fall.

Italian PM Enrico Letta has been addressing parliament ahead of a crucial vote of confidence in his governing coalition

Italian PM Enrico Letta has been addressing parliament ahead of a crucial vote of confidence in his governing coalition

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.”

In an apparent break with Silvio Berlusconi, his deputy and party secretary Angelino Alfano said PDL MPs should back Enrico Letta in the confidence vote.

“I am firmly convinced that our party as a whole should vote confidence in Letta,” said Angelino Alfano, who is also Italy’s interior minister.

The first vote on Wednesday is in Senate and is expected around midday. This will be the crucial moment, as it is where Silvio Berlusconi’s allies have a narrow majority. The chamber of deputies will vote later.

Enrico Letta needs 161 votes in the Senate but can only count on the support of about 137 members, meaning he will need about 25 votes from others.

There are reports that between 30 and 40 PDL senators may vote for the government.

Angelino Alfano’s comments had caused the Italian stock market to jump on Tuesday as investors appeared increasingly confident that the government would not fall.

Carlo Giovanardi, a senator from Silvio Berlusconi’s party, indicated he would support the government, adding: “We want to remain a moderate force.”

Fabrizio Cicchitto, a PDL deputy, said: “Making the government fall would be a mistake.”

He said any new government would be “hostile to the PDL” and would be a boon for Enrico Letta’s centre-left Democratic Party.

On Tuesday, Enrico Letta refused to accept the resignations of five ministers from the PDL, Italy’s Ansa news agency reported, citing a government source.

Enrico Letta called the vote of confidence after Silvio Berlusconi ordered his ministers to leave the government in protest at a rise in VAT (sales tax).

The prime minister accused Silvio Berlusconi of using the issue as an “alibi” for his own personal concerns.

Analysts say the crisis threatens to hamper badly needed reforms to tackle Italy’s economic problems that include debt, recession and high youth unemployment.

The International Monetary Fund has warned that political tensions are a risk to the Italian economy.

Enrico Letta’s cross-party alliance was formed in April after two months of political deadlock following an inconclusive election.

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Italy’s deepening political crisis has impacted the financial markets.

The Italian market fell more than 2% and the euro fell to the lowest level since June against the Swiss Franc.

Italy’s 10-year bond yield – an indication of how much the government has to pay to borrow money – rose as high as 4.66%, the highest level in more than 3 months.

PM Enrico Letta plans to hold a confidence vote on Wednesday, to seek the backing of Italy’s parliament.

PM Enrico Letta plans to hold a confidence vote on Wednesday after five ministers from Silvio Berlusconi's party stepped down

PM Enrico Letta plans to hold a confidence vote on Wednesday after five ministers from Silvio Berlusconi’s party stepped down

Enrico Letta was forced to make that move after five ministers from Silvio Berlusconi’s party stepped down at the weekend.

But those ministers have now given mixed signals as to whether they are actually leaving the government.

The crisis follows weeks of worsening ties between Silvio Berlusconi’s party and Enrico Letta’s grouping.

Silvio Berlusconi’s People of Freedom (PDL) objects to a planned increase in sales tax, which is part of wider government policy to reduce big public debts.

The Italian economy is in a dire state.

It is forecast to shrink by 1.4% this year according to the national statistics agency.

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Italian President Giorgio Napolitano is considering ways out of an acute political crisis after ex-PM Silvio Berlusconi’s ministers left the coalition government.

Giorgio Napolitano hinted that he would try to oversee the formation of a new coalition without calling elections.

This follows weeks of worsening ties between Silvio Berlusconi’s party and PM Enrico Letta’s centre-left grouping.

Silvio 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 IMF has warned that coalition tensions represent a risk to the Italian economy.

Italian President Giorgio Napolitano is considering ways out of an acute political crisis after ex-PM Silvio Berlusconi's ministers left the coalition government

Italian President Giorgio Napolitano is considering ways out of an acute political crisis after ex-PM Silvio Berlusconi’s ministers left the coalition government

Speaking on Saturday, Giorgio Napolitano called for political continuity in the country.

“We need a parliament that discusses and works, not that breaks up every now and then,” he said.

“We do not need continuous election campaigns, we need continuity of the government’s actions, decisions and its measures to resolve the problems of this country.”

Later on Sunday, Giorgio Napolitano is expected to meet Enrico Letta, and their talks will be closely watched for the first indications as to how this crisis will play out.

Enrico 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.

Silvio Berlusconi pre-empted that, describing Enrico 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.

Interior Minister and PDL Secretary Angelino Alfano accused Enrico Letta of “a grave violation of the pacts that this government is founded on”.

But the prime minister responded angrily to the 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.”

Silvio 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.

Silvio Berlusconi was sentenced to a year in jail, but is expected to serve house arrest or community service because of his age.

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Italy’s PM Enrico Letta has threaten to resign unless his cabinet gets clear backing in a parliamentary vote expected to be called next week.

Enrico Letta’s warning came after the government failed to approve key budget measures.

His government is an unstable coalition between his party and that of ex-PM Silvio Berlusconi.

Silvio Berlusconi could lose his Senate seat after his fraud conviction. His backers say they would leave the cabinet in protest.

“I have no intention of limping along or being the subject of continuous threats,” Enrico Letta said in a statement after the government meeting late on Friday.

“Either we go forward, and the interests of the country and citizens are put first, or this experience ends here.”

PM Enrico Letta has threaten to resign unless his cabinet gets clear backing in a parliamentary vote expected to be called next week

PM Enrico Letta has threaten to resign unless his cabinet gets clear backing in a parliamentary vote expected to be called next week

Two government ministers said that Enrico Letta was now planning to call a confidence vote in parliament next week.

The cabinet is close to collapse just at a time when Italy desperately needs political stability if it is to begin to emerge from its long economic crisis.

If Silvio Berlusconi’s PDL pulled out of the government, it would lead to snap elections.

President Giorgio Napolitano and business leaders have warned against new polls while is still mired in recession, saying they could reignite fears about the country’s stability and financial position.

According to a 2012 anti-corruption law, Silvio Berlusconi should be ejected from the upper house after the Supreme Court last month upheld his fraud conviction.

After a party meeting on Wednesday, Silvio Berlusconi’s MPs threatened to resign en masse if the Senate votes next week o expel their mentor.

The Italian news agency Ansa cited sources who said PDL members were already writing out their resignations and threatening to hand them in to the party whips.

Silvio Berlusconi has been sentenced to a year in prison, but because of his age is expected to serve house arrest or community service.

It was his first conviction to be confirmed on appeal in two decades of fighting legal cases.

Last week Silvio Berlusconi vowed to stay in politics even if he lost his place in the Senate.

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G20 leaders at Saint Petersburg summit remain divided over the Syrian conflict as they enter the final day of their meeting.

Italian PM Enrico Letta said the splits were confirmed during a working dinner in St Petersburg on Thursday.

A spokesman for the Russian presidency said a US strike on Syria would “drive another nail into the coffin of international law”.

At the UN, the US Ambassador Samantha Power accused Russia of holding the Security Council hostage by blocking resolutions.

Samantha Power said the Security Council was no longer a “viable path” for holding Syria accountable for war crimes.

The US government accuses President Bashar al-Assad’s forces of killing 1,429 people in a poison-gas attack in the Damascus suburbs on August 21.

The UK says scientists at the Porton Down research laboratories have found traces of sarin gas on cloth and soil samples.

But Bashar al-Assad has blamed rebels for the attack. China and Russia, which have refused to agree to a Security Council resolution against Syria, insist any action without the UN would be illegal.

The US and France are the only nations at the G20 summit to commit to using force in Syria.

Samantha Power told a news conference in New York: “Even in the wake of the flagrant shattering of the international norm against chemical weapons use, Russia continues to hold the council hostage and shirk its international responsibilities.

G20 leaders at Saint Petersburg summit remain divided over the Syrian conflict as they enter the final day of their meeting

G20 leaders at Saint Petersburg summit remain divided over the Syrian conflict as they enter the final day of their meeting

“What we have learned, what the Syrian people have learned, is that the Security Council the world needs to deal with this crisis is not the Security Council we have.”

President Barack Obama is thought to be trying at the G20 summit to build an international coalition to back strikes against military targets in Syria.

But differences of opinion became obvious when world leaders – including Barack Obama and Russian President Vladimir Putin – discussed Syria over dinner on Thursday evening.

Enrico Letta said in a tweet that “the G20 has just now finished the dinner session, at which the divisions about Syria were confirmed”.

President Vladimir Putin’s press spokesman, Dmitry Peskov, said after the dinner that the G20 was split down the middle, with some countries seeking hasty action and others wanting the US to go through the UN Security Council.

British sources say the leaders of France, Turkey, Canada and the UK gave strong backing to President Barack Obama’s call for military action. The UK Chancellor of the Exchequer George Osborne said the Turks put a “very strong argument about how the world must respond to the use of chemical weapons”.

But correspondents in St Petersburg say opponents of US military intervention appear to far outnumber supporters within the G20.

However, the views of the G20 leaders on any US action could be the least of Barack Obama’s worries, as his real difficulties might lie back in the US.

He was nearly an hour late for Thursday’s G20 dinner. His aides said he had been trying to find time during the summit to call US members of Congress, who are due to vote next week on whether to back Barack Obama’s call for a military strike.

President Barack Obama also cancelled a trip to California on Monday in order to lobby Congress, as a poll commissioned by the BBC and ABC News suggested more than one-third of Congress members were undecided whether or not to back military action.

A majority of those who had made a decision said they would vote against the president.

Syria’s parliamentary speaker has written to the speaker of the House of Representatives urging members not to rush into an “irresponsible, reckless action”.

The Assad regime has been accused of using chemical weapons against Syrian civilians on several occasions during the 30-month conflict.

Some 100,000 people have died in the conflict, and more than two million Syrians are classified as refugees, according to the UN.

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Michaela Biancofiore, an Italian junior equal opportunities minister, has resigned the day after being sworn in to new coalition, having said gay people invited discrimination by “ghettoizing” themselves.

Michaela Biancofiore was defending herself against accusations of homophobia made by human rights groups.

But she invoked more wrath with Saturday’s comments to Italian media.

The sacking is an upset for Italian PM Enrico Letta’s one week old left-right coalition, analysts say.

On Friday, Enrico Letta, the Democratic Party deputy leader (PD), warned ministers in the fledgling government to work together and maintain “sobriety” when talking to the media.

Michaela Biancofiore is a member of Italy’s ex-PM Silvio Berlusconi's centre-right People of Freedom party

Michaela Biancofiore is a member of Italy’s ex-PM Silvio Berlusconi’s centre-right People of Freedom party

Michaela Biancofiore, a member of ex-PM Silvio Berlusconi’s centre-right People of Freedom party (PDL), has been redeployed to the civil service ministry.

She says she supports “civil unions” to protect gay couples but opposes gay marriage.

But Saturday’s Italian newspapers quoted her as saying: “For once, I would like to see gay associations, instead of <<ghettoizing>> themselves… say something to condemn the recent spate of killings of women [in Italy]… All they do is defend their own interests.”

Enrico Letta’s new coalition is proving as fragile as forecast, because old political enemies of left and right are finding it difficult to work together as a team.

Silvio Berlusconi, who is not a member of the new government, but who remains an influential political player, is trying to dictate terms and conditions under which the new coalition must operate.

Political observers say at any minute Silvio Berlusconi could force new elections by withdrawing the support of his party from the hybrid coalition.

Friday’s swearing-in of the new government at Rome’s presidential Quirinale Palace signaled the end of two months of political deadlock.

Since February’s inconclusive poll there has been political stalemate in Italy, which is still plagued by economic woes after becoming one of the first eurozone victims of the global financial crisis of 2008.

A man has been arrested in Italy after he shot two police officers outside the PM’s office in Rome during new government swearing-in ceremony.

One of the officers was shot in the neck and is said to be in a serious condition.

The incident was around a kilometre away from the swearing-in ceremony at the Quirinal Palace.

Democratic Party Deputy Leader (PD), Enrico Letta, becomes prime minister at the head of a “grand coalition” including Silvio Berlusconi’s People of Freedom party (PDL).

The swearing-in signals the end of two months of political deadlock.

Correspondents say the “grand coalition” between Italy’s current main right- and left-wing parties is unprecedented, and will probably prove an uneasy alliance.

A man has been arrested in Italy after he shot two police officers outside the PM's office in Rome during new government swearing-in ceremony

A man has been arrested in Italy after he shot two police officers outside the PM’s office in Rome during new government swearing-in ceremony

Silvio Berlusconi had said he would not be a minister, but had pushed for leading figures from his party to be given top posts.

Angelino Alfano, the PDL’s secretary and one of Silvio Berlusconi’s closest political allies, is deputy prime minister and interior minister in the new government.

Among the other key appointments is Bank of Italy director general Fabrizio Saccomanni to head the powerful economy ministry.

The cabinet is to have more women than usual, including former European Commissioner Emma Bonino as foreign minister.

Other women given government jobs include Olympic kayaker Josefa Idem who becomes minister of equal opportunity and sports, and Anna Maria Cancellieri at the ministry of justice.

Since February’s inconclusive poll there has been political stalemate in Italy, which is still plagued by economic woes after becoming one of the first eurozone victims of the global financial crisis of 2008.

President Giorgio Napolitano said on Saturday that the government would have the support of both chambers of parliament.

“I hope that this government can get to work quickly in the spirit of fervent co-operation and without any prejudice or conflict,” the president said.

“It was and is the only possible government.”

President Giorgio Napolitano, who is serving an unprecedented second term in Italy, has suggested he might resign if the new government fails to enact reforms.

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A deal on the formation of a new government has been reached in Italy, ending two months of political deadlock since the general election.

The agreement was announced after Prime Minister-designate Enrico Letta met President Giorgio Napolitano.

The coalition brings together Enrico Letta’s Democratic Party (PD) and the People of Freedom party (PDL) of former PM Silvio Berlusconi.

The swearing-in is to take place on Sunday at 11:30 local time.

Silvio Berlusconi had said he would not be a minister, but had pushed for leading figures from his party to be given top posts.

Angelino Alfano, the PDL’s secretary, will become deputy prime minister and interior minister in the new government.

Among the other key appointments proposed, Bank of Italy director general Fabrizio Saccomanni will head the powerful economy ministry and former European Commissioner Emma Bonino will become foreign minister.

Italian Prime Minister-designate Enrico Letta has agreed new government ending two months of political deadlock

Italian Prime Minister-designate Enrico Letta has agreed new government ending two months of political deadlock

The formation of the new government brings to an end a political deadlock that has unnerved financial markets since February’s inconclusive election.

President Giorgio Napolitano said the government would have the support of both chambers of parliament.

“I hope that this government can get to work quickly in the spirit of fervent co-operation and without any prejudice or conflict,” he said.

“It was and is the only possible government.”

The new government has to deal with a rapidly declining economic situation, rising unemployment – particularly among under the 35s – and lack of growth, despite some draconian austerity measures passed by the previous government of technocrats.

Enrico Letta, 46, is considered a moderate within the PD and is linked to Silvio Berlusconi through his uncle, Gianni Letta, who is one of Berlusconi’s closest aides.

Silvio Berlusconi is still contesting charges of tax fraud and sex with an underage prostitute, but recent opinion polls suggest his popularity has increased, giving him greater bargaining power.

Enrico Letta expressed “sober satisfaction over the team we put together”.

He has said he will shift the focus away from austerity to resolve Europe’s economic problems.

Enrico Letta’s candidacy for prime minister emerged after the PD leader, Pier Luigi Bersani, announced his resignation following a party rebellion over his choice for Italian president and his refusal to work with Silvio Berlusconi.

The third strongest force to emerge from the Italian election, the Five Star movement led by former comedian, Beppe Grillo, has refused to take part in a coalition with the two main parties.

He likened such a coalition to “an orgy worthy of the best of bunga bunga” in a barb directed at Silvio Berlusconi’s renowned private parties.

President Giorgio Napolitano, who is serving an unprecedented second term, has suggested he might resign if a new government fails to enact reforms.

Italian government – proposed posts:

  • Enrico Letta, 46: Prime minister
  • Angelino Alfano, 42: Deputy PM and interior  minister
  • Fabrizio Saccomanni, 70: Economy minister
  • Emma Bonino, 65: Foreign minister
  • Anna Maria Cancellieri, 69: Justice minister
  • Enrico Giovannini, 55: Labour minister
  • Mario Mauro, 51: Defence minister

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Enrico Letta appears set to become Italy’s new prime minister, after being asked by President Giorgio Napolitano to form a broad coalition government.

The appointment of Enrico Letta, currently deputy leader of the centre-left Democratic Party, could see the end of two months of parliamentary deadlock.

An inconclusive general election in February left the country in political limbo.

Enrico Letta, 46, said he would aim to change the course in Europe on austerity.

“European policies are too focused on austerity which is no longer enough,” he said, following the closed-door meeting with the president in Rome.

He also said he had accepted the post knowing that it was an enormous responsibility and that Italy’s political class “has lost all credibility”.

Enrico Letta must now form a cabinet that can win cross-party support and a vote of confidence in parliament, possibly this weekend.

Factions from across the political spectrum, including former PM Silvio Berlusconi’s right-wing People of Freedom Party (PDL), have indicated that they are ready to form a coalition under a figure like Enrico Letta.

However, Silvio Berlusconi’s party and the Democratic Party (PD) differ on a number of issues.

Enrico Letta appears set to become Italy's new prime minister, after being asked by President Giorgio Napolitano to form a broad coalition government

Enrico Letta appears set to become Italy’s new prime minister, after being asked by President Giorgio Napolitano to form a broad coalition government

PDL National Secretary Angelino Alfano warned that his group would not take part in a government unconditionally.

Enrico Letta, once a member of the former centre-right Christian Democrats, is seen as moderate of the left. His uncle, Gianni Letta, has been Silvio Berlusconi’s chief-of-staff for 10 years.

A broad political alliance would again make Silvio Berlusconi a major influence.

This awkward coming together of bitter rivals is seen as the only way to end the parliamentary stalemate and put an administration in place.

But it is a forced political marriage that may not last long.

Enrico Letta’s candidacy for prime minister came about after the PD leader, Pier Luigi Bersani, announced his resignation last week.

He had ruled out working with Silvio Berlusconi and faced a party rebellion over his choice for Italian president.

The third strongest political force to come out of February’s election, former comedian Beppe Grillo’s Five Star movement, could not be persuaded to join a coalition and is expected to be in opposition.

With the Italian economy still struggling, the new government will be expected to try to implement a limited range of economic and institutional reforms.

Among its priorities will be an effort to re-shape the current election law. The aim would be to ensure that future general elections would deliver more emphatic, clear-cut results.

Enrico Letta’s appointment follows the swearing-in on Monday of President Giorgio Napolitano, who berated his country’s feuding politicians.

Taking up an unprecedented second term, he told the assembled MPs that they had been guilty of a long series of failings and that their inability to implement key reforms had been “unforgivable”.

Giorgio Napolitano has threatened to resign if no administration is formed.

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