Silvio Berlusconi's closest coalition ally Umberto Bossi told him to resign on Tuesday in what could be a mortal blow to the Italian prime minister.

Bossi, head of the devolutionist Northern League, said the 75-year-old media magnate should be replaced by Angelino Alfano, secretary of the premier's PDL party.

"We asked the prime minister to stand down," Bossi told reporters outside parliament.

Berlusconi has until now remained defiant ahead of a key parliamentary vote on Tuesday afternoon, refusing calls from all sides to step down, but Bossi's call could tip the balance against him.

The League, together with many members of the PDL, are believed to want Berlusconi to make way for a new centre-right government capable of facing a huge economic crisis and restoring the confidence of markets without handing power to a transitional administration.

However, the centre-left opposition also said it would not vote to expose the weakness of Berlusconi's support while allowing the passage of a vital measure for state financing.

This means the measure will likely pass but Berlusconi could be exposed to a humiliatingly low vote that would ratchet up the pressure to topple him.

But Berlusconi, who has dominated Italian politics for 17 years, has refused appeals from all sides to step down despite stark signs that he has lost the confidence of markets.

"I'm not leaving," was the headline in the fanatically pro-Berlusconi newspaper 'Il Giornale', owned by his brother.

Speaking before the latest defections, Berlusconi said he had won back enough party rebels to win the vote and he would then table roll-call confidence motions on sweeping economic reforms promised to fellow European leaders.

"I want to look at those who want to betray me to my face," he said.

If Berlusconi's support falls below around 310 votes in the 630-seat lower house, he will face massive pressure to go. Current calculations seem to put him well below that number.