Berlusconi heads to G20 amid mutiny at home

Mr Berlusconi had wanted to issue a decree covering fresh austerity measures, thus bypassing the parliament, but was held back by Giorgio Napolitano, the country’s president, and his own finance minister, Giulio Tremonti.

“Not because of opposition to the instrument in principal, but because it is said that many measures had been included that have nothing to do with the economic crisis,” reports Italian daily Corriere della Sera.

Instead, Mr Berlusconi was forced to agree to a “maxi-amendment”, to be attached to a “law for stablility” set to be approved by parliament next week.

It is then that Mr Berlusconi may face his biggest obstacle to date.

"We think that next week will be a week in parliament where we try to force the situation if Berlusconi does not resign before," Enrico Letta, deputy general secretary of the centre-left Democratic Party, the country’s biggest opposition party, told Reuters.

Mr Berlusconi’s grip on power seems to be slipping. His approval ratings touched a record low of 22 percent in a poll on Wednesday. His coalition ally, the hard-right Northern League, said it will “set off a revolution” if the government touches the retirement age. Six of his own deputies on Wednesday wrote a letter asking him to “act like a statesman” and “to promote a new government”.

Mr Napolitano, meanwhile, has been meeting with opposition leaders, "who have expressed their availability to take the necessary responsibility in the face of the growing economic crisis," according to a statement from the president.

The precise content of the anti-crisis package remains unknown. “We’re going ahead with the commitments [as set out] in the letter of intent presented to Europe,” Mr Tremonti is reported as saying while leaving the cabinet meeting late last night.

The letter, presented at the EU summit last week after European leaders had pressed Mr Berlusconi to come up with concrete measures to tackle the country’s massive debt, listed a number of measures, including raising the retirement age to 67 and making it easier for companies to fire employees.

An official government communique, however, distributed just after midnight, stressed: “Any texts that might be circulating do not correspond with what has been examined and approved in the council of ministers”.