Outgoing Italian Prime Minister Silvio Berlusconi announced his resignation, hours after centre-left leader Romano Prodi succeeded in getting his candidates elected to the influential posts of speaker in both houses of parliament.

Centre left coalition Speaker candidate Franco Marini (R) looks away as he waits for the results of the vote for the speaker of Italy's Senate in the upper house in Rome. Marini won the top Senate job. The Senate speaker is also the country's vice president and holds the second most powerful position in Italian politics. [AFP]

Berlusconi, the narrow loser in the April 9-10 general election, said he would hold his last cabinet meeting on Tuesday at 12:30 pm (1030 GMT) and immediately afterwards hand in his resignation to President Carlo Azeglio Ciampi.

Ciampi, whose presidential term expires on May 18, must decide whether formally to ask Prodi to form the new government or whether he will leave the duty to his successor as head of state.

The political left hopes Ciampi will move swiftly to get a new government in place and cut short what as been a trying month of uncertainty.

Berlusconi's conservative alliance has sought to block the new centre-left government at every turn, especially in the upper house -- the Senate -- where Prodi's coalition has only a tiny two-seat majority.

But on Saturday morning the lower house, the Chamber of Deputies, gave the post of speaker to Fausto Bertinotti, leader of the refounded communist party, which is part of Prodi's coalition.

And in the afternoon Franco Marini of the centre-left Margherita party, another of Prodi's coalition allies, won the top Senate job. The Senate speaker is also the country's vice president and holds the second most powerful position in Italian politics.

Berlusconi, who has bitterly contested the election result and refused formally to concede to Prodi, had indicated that he would tender his resignation to Ciampi once the speakers of both houses were chosen.

But even that was thrown into question earlier on Saturday when "Il Cavaliere" told journalists he would step down "when the time is right".

The announcement that he would finally relinquish the reins of power, made to reporters at his coalitions headquarters shortly after Prodi's candidates were elected as speakers, lifted a considerable weight from the left's shoulders.

"Everything fell into place in the space of four hours," Prodi said after the parliamentary votes.

The 66-year-old former economics professor now has the means to govern, despite his narrow election victory.

Prodi's successes on Saturday came after an arduous battle with the right, which has been accused of deliberate obstruction tactics.

Prodi's Union coalition got off to a shaky start when his choices to lead the houses of parliament were rejected on Friday.

Bertinotti, 66, only won the top post in the Chamber of Deputies after four rounds of voting. Some members of Prodi's own alliance -- which ranges from centrists to communists -- are thought to have voted against him, although he finally obtained more than the simple majority needed.

It was a harder fought leadership battle in the Senate, where Prodi's coalition has 158 seats, against 156 for Berlusconi's conservative House of Freedoms alliance.

Prodi's candidate Marini, a 73-year-old former trade union leader, failed to win two rounds of voting plus a repeat ballot.

It was not until Saturday afternoon that he clinched a slim nine-vote victory over right-winger Guilio Andreotti, the 87-year-old former leader of the Christian Democrats, who dominated Italian politics from the end the World War II to the early 1990s.

Marini said he would be "the speaker of all the senators, attentive to the rights of both the majority and the minority".

Both he and Bertinotti were received by President Ciampi on Saturday and joined him at a commemoration at Ciampino military airport to mark the return of the bodies of three Italian soldiers killed in Iraq on Thursday.

One of Prodi's next tests, in the face of the right's threat to block every move his government makes, will come when he seeks a vote of confidence.

"Our objective is to bring it (the government) down as soon as possible," said outgoing Welfare Minister Roberto Maroni on Friday.

"Berlusconi knows that if it lasts five years, he will find it difficult to run as head of government again. But if it doesn't last even a year, he will go forward," he said.