Italy is mired in fresh political turmoil, with the president facing impeachment calls after he vetoed a choice for finance minister.
In a rare move, President Sergio Mattarella said he could not appoint the Eurosceptic Paolo Savona, citing concerns by investors.
The decision ended a bid by Italy's two populist parties to form a coalition.
Mattarella may now appoint a stop-gap prime minister with early elections looking increasingly likely.
He has summoned Carlo Cottarelli, a former executive director of the International Monetary Fund, who could form an interim administration.
Italy, the eurozone's fourth-biggest economy, has been without a government since elections in March because no political group can form a majority.
The Five Star Party had been trying to form a government with another populist party, the right-wing League.
The BBC's James Reynolds in Rome says a temporary prime minister is unlikely to last long and early elections may have to be called.
There is now a real argument between the president and the populists about Italy's position in the EU, he adds.
Source : BBC