Italian PM Silvio Berlusconi is demanding a review of spoilt ballot papers, as he refuses to accept Romano Prodi's election victory.
Silvio Berlusconi says he wants all the proper legal checks
Mr Berlusconi is insisting on waiting until a batch of 43,000 contested ballot papers which were put aside by scrutineers have been re-examined.
Mr Prodi, who led the centre-left opposition coalition, said "victory was clear in both houses of parliament".
He said cabinet talks would take place in the next few days.
Mr Prodi, who rejected Mr Berlusconi's suggestion of forming a grand coalition, was declared official winner of the parliamentary election after an extremely close race.
But Mr Berlusconi, who heads a centre-right bloc, refused to admit defeat, saying there had been irregularities.
Official results showed Mr Prodi had won just enough seats to control the Senate (upper house) after having already won a lower house majority.
The count gave Mr Prodi 158 Senate seats, against 156 for Mr Berlusconi. The interior ministry insists the results must still be confirmed by Italy's highest court, and that parliament's election committees would have to rule on any challenges.
The prime minister says there were irregularities - particularly in the votes of Italians abroad.
"We won't hesitate to recognise the political victory for our adversaries, but only once the necessary legal verification procedures have been completed," said Mr Berlusconi.
The review of the ballots could take weeks and Mr Prodi's supporters have called the move irresponsible.
But Mr Prodi is pressing ahead with plans to form a government. He says cabinet talks will get under way soon, although he added that a government would not be formed until after the presidential elections in May.
"We have won. It was a difficult day, but a good day," he told Europe 1 radio in an interview from Rome.
"The victory is now clear in the two houses... by short in the Senate but by very large in the Lower House."
He dismissed concerns that the vote had left Italy split in two, saying that it was not "particular" to Italy.
"Germany is split into two; France is split into more than two," he said, adding that the difference of votes between George W Bush and John Kerry in the US elections was "even narrower than in Italy".
The final results came after a nail-biting night of conflicting forecasts, based on exit polls and partial counts, which variously put the coalitions of Mr Prodi and his rival ahead.
The leader of the observation team from the Organisation for Security and Co-operation in Europe, Peter Eicher, said there appeared to be irregularities including "a very large number of blank, invalid or contested ballots".
He did not accuse either side, but said he also had misgivings about the late adoption of new electoral laws and unbalanced coverage by parts of the Italian media.
The coalition led by Mr Prodi - a former Italian prime minister and president of the European Commission - is thought to have won the vote in the lower house by just 25,000 votes.
But changes to the electoral system meant whoever won the lower house would automatically get a working majority there, even if the margin was small.