Florence mayor Matteo Renzi was poised to win the nomination to be Italy's youngest-ever prime minister following political talks on Saturday after the ouster of Enrico Letta by their centre-left Democratic Party.
President Giorgio Napolitano held a day of formal consultations with political leaders that proved more complicated than expected and analysts said Renzi could be asked to form a new government only on Monday.
"A happy ending is not guaranteed," said Angelino Alfano, leader of the New Centre-Right party, a minor partner in the current coalition whose votes could prove crucial to the formation of a Renzi government.
"We can't finish in 48 hours," Alfano said after meeting with Napolitano, adding that he would refuse to ally with Renzi if the government proved "too leftist" and would then push for early elections.
Nichi Vendola, leader of the opposition Left, Ecology and Liberty party, ruled out taking part in a Renzi coalition and said the new government would be tainted with the "original sin" of Renzi's underhand tactics.
The anti-establishment Five Star Movement meanwhile protested at what it called an undemocratic power grab by Renzi and boycotted the talks, saying Italians should be allowed to choose through elections.
Letta stepped down on Friday after the Democratic Party approved a motion calling for a new government proposed by the 39-year-old Renzi, an ambitious ex-Boy Scout elected to the party leadership in December.
Renzi would be the European Union's youngest prime minister if he succeeds and has promised radical reforms to combat rampant unemployment, boost growth and slash the costs of Italy's weighty bureaucracy.
Opinion polls show Renzi is popular, mainly because as someone with no experience in national government or parliament he is seen as a welcome breath of fresh air in Italy's discredited political system.
But surveys also indicate that most Italians would have preferred early elections and are opposed to what critics dismissed as a "palace coup" engineered by Renzi following weeks of bitter feuding with Letta.
"Renzi is a few strides from the finish line in his quest for the premier's chair but he has not managed to unite the country behind him," said Stefano Folli, an analyst for the business daily Il Sole 24 Ore.
"There is a slight scepticism in the air," he said, adding that Renzi's promise to govern until the next scheduled elections in 2018 was "not very credible" given the fragmentation of Italy's political scene.
Investors are betting on a Renzi government pushing through key reforms, however, with stocks rising as Letta resigned and Moody's ratings agency improving its outlook for Italy from negative to stable.
Italy's economy also showed signs of emerging from a devastating recession, with a preliminary estimate on Friday showing it grew 0.1 percent in the last quarter of 2013 -- the first positive result in two years.
- Renzi government 'not a given' -
President Napolitano was set to conclude his consultations later on Saturday and if Renzi receives the presidential mandate he will then have to hold his own negotiations on forming a government over the next week.
The participation in the consultations of disgraced former prime minister Silvio Berlusconi was particularly controversial as he was expelled from parliament last year over a tax fraud conviction.
Berlusconi took part as leader of the Forza Italia (Go Italy) party but said he would not join a coalition and looked to score political points by criticising Renzi's move as not fitting for a democracy.
"We expressed our concern and surprise at this opaque crisis, which is taking place outside of parliament and without hearing a word on what the new government's programme will be," Berlusconi said.
Renzi has been criticised in the past for being short on concrete proposals and for a brash leadership, although many Italians -- including particularly younger people -- like his informal, web-savvy style.
Renzi's first political appointment was in 2004 when he was elected to lead the province of Florence with 58.8 percent of the vote in a surprise victory.
He was praised for lowering local taxes, establishing an efficient recycling system and promoting innovation and was elected mayor of the historic city in 2009.
He has said he looks to US President Barack Obama and former British prime minister Tony Blair as models, although he is still little known internationally.