His cabinet includes two ministers from the Communist Party of Italy - the first time that party members have taken office since 1947.

The composition of Mr D'Alema's government suggests Italian politicians are beginning to see beyond traditional divisions of left and right.

He himself played an important role in establishing a new Democratic Left party, following the break-up of the Soviet Union.

The new government consists of

• Mr D'Alema's own Democratic Left party,
• the Communist Party of Italy,
• several independents,
• and a small centre-right group, the Democratic Union for the Republic

This latter party was formed out of the wreckage of the old Christian Democrat party which dominated Italian politics from the end of WWII until its own break-up in the early 1990s amid corruption scandals.

Prodi misses the prize

The previous government, of Romano Prodi, held power for two-and-a-half years - providing remarkable stability in the context of Italian politics.

And until his left-of-centre government lost a confidence vote by one vote earlier this month he must have believed he was succeeding in his aim of breaking the mould of Italian politics.

He compared his coalition of former communists, centrists, leftists and greens with Tony Blair's Labour Party; his avowed aim was to have a five-year unbroken period of stable government.

His Olive Tree coalition - named for its symbolism of Italian life, peace and durability - even won an outright majority in the Senate in elections in April 1996.

However the government was always dependent on support from hardline communists for a majority in the lower house, and this finally proved his downfall when he presented an austerity budget.

Hopes of consensus

His longer term aim had been to encourage a system of two party politics and bring about an end to Italy's chronic ungovernability and political corruption.

"What Italy needs is greater consensus among the social partners, not division," Mr Prodi had said.

There had even been talk of turning his ruling coalition - dominated by the former communists of the Democratic Left - into a party similar to the US Democratic Party.

President Scalfaro wants to avoid elections

This was made more likely after electoral reforms in 1993 had partially replaced a proportional representation system with a first past the post system, so making it more difficult for smaller parties to be elected.

Eight of these parties are now in the two big groupings which dominate Italian politics - the Olive Tree Coalition and the right of centre Freedom Alliance.

The quest for stability

Mr D'Alema is expected to try to continue his predecessor's economic policies.