Italy's conservative opposition leader Silvio Berlusconi has again insisted on early elections, jeopardising efforts to form an interim government.
Silvio Berlusconi thinks he can beat the centre-left bloc again
He held unsuccessful talks on Monday with Franco Marini, the senate speaker appointed by the Italian president to try to form a new governing coalition.
Later Mr Berlusconi urged the president to "call elections immediately".
The president now has little option but to dissolve parliament, our correspondent says.
Prime Minister Romano Prodi resigned on 24 January after losing a confidence vote.
The centre left, reeling from their collapse in that vote, now have an enormous challenge ahead, with recent surveys putting Mr Berlusconi 10 points ahead in the polls, says the BBC's Christian Fraser in Rome.
Mr Marini held a final round of consultations on late on Monday with Walter Veltroni, head of the centre-left Democratic Party, before reporting back to President Giorgio Napolitano.
But the senate speaker said on Monday night he could not raise enough support for an interim government to change voting rules which have been blamed for much of Italy's political instability.
That failure clears the way for new elections which are likely to be held in April.
The Italian president wants an interim government to change the country's electoral law, which is widely blamed for the current political instability.
While a snap election could see Mr Berlusconi return to power, senior senators believe that Italy needs new electoral laws.
Under the current system, implemented by Mr Berlusconi during his time as prime minister, smaller parties with only a handful of seats hold the balance of power in parliament.
Mr Berlusconi has said he is willing to negotiate on electoral reform, but only after they've been to the polls.
Last month, the loss of the support of the small centrist Udeur party in the Senate left Mr Prodi's coalition without a majority and requiring the support of several unelected life senators.
In a subsequent confidence vote, Mr Prodi's government fell four votes short of the 160 it needed to survive.