Silvio Berlusconi has formally resigned as prime minister of Italy, paving the way for Romano Prodi to form a new government of the centre-left.
The focus is switching to the president and his successor
The centre-right leader, who was narrowly defeated at last month's election, handed in his notice to President Carlo Azeglio Ciampi.
However, Mr Ciampi has asked him to stay on as caretaker prime minister.
The president is himself leaving office this month and wants his successor to oversee the change of government.
But he is under growing political pressure to appoint Mr Prodi this week.
Mr Berlusconi went to the Quirinal Palace, the official residence of Mr Ciampi, after a meeting of his cabinet.
"The president of the republic asked [Mr Berlusconi] to stay in charge to handle current affairs," a statement from Mr Ciampi's office said.
His resignation opens the way for Mr Prodi to receive a mandate to form a centre-left coalition government.
He, Mr Berlusconi and Mr Ciampi all attended a state funeral in Rome earlier on Tuesday for three Italian soldiers killed by a bomb in Iraq last week.
Mr Prodi says he will keep his list of ministers ready in his pocket for whenever Mr Ciampi calls him.
"I hope the political vacuum doesn't go on for too long," he added.
It is now up to the president to decide on whether to accelerate the change in command in Rome, the BBC's David Willey reports.
Meanwhile, our correspondent adds, another bitter political battle is looming in the Italian parliament over the choice of who is to be the new head of state for the next seven years.
Italy's president, he notes, is mainly a figurehead but at election time he plays a vital role in overseeing any change of government.
Media reports suggest former Prime Minister Massimo D'Alema as the centre-left's favoured candidate while Mr Berlusconi has mentioned Gianni Letta, an undersecretary of state in his government, as the centre-right's possible choice.
Mr Ciampi's term expires on 18 May. His successor will be elected at a joint sitting of parliament.
In office for five years, Mr Berlusconi served longer than any other Italian prime minister in the past 50 years.
However, his popularity fell as the Italian economy faltered with the budget deficit exceeding European Union limits for the past two years.
Mr Prodi has promised a review of government finance, better tax collection and the re-introduction of inheritance tax on the country's wealthiest people.
His centre-left bloc won a convincing majority in the lower house of parliament but has a tiny Senate majority.
Although Mr Berlusconi said he recognised Mr Prodi had "won the consensus", he said that his own coalition won a larger share of the popular vote in the Senate in the poll on 9-10 April.
"We remain convinced that the majority prize has been wrongly assigned," he said.
The defeated media magnate, 69, has made clear he will lead the opposition to the new government.
"We will be in parliament to be an opposition which will certainly be very rigorous," he said.