Updated: Italy PM Matteo Renzi to resign on Wednesday, budget approved

Italy's Prime Minister Matteo Renzi is to resign on Wednesday, after his resignation was delayed when he conceded defeat following the referendum on constitutional reform.

Italian Prime Minister Matteo Renzi is to resign on Wednesday, after his resignation was delayed when he conceded defeat following the referendum on constitutional reform.

Renzi initially wanted to resign after he lost the referendum in the early hours on Monday, but was urged by President Sergio Mattarella to stay at least until the 2017 budget was approved.

Italy’s Parliament gave its final approval for the government's budget on Wednesday, as it bypassed amendments to speed up its passage to the Senate, passing with 173 votes in favour to 108.

Renzi said he will formally tender his resignation at 1800 GMT.

The Prime Minister gambled his future on a referendum to amend the country’s constitution in order to reform the powers of Parliament and the Senate. Italians voted ‘No’ by 59.11% to 40.89% on 65.48% turnout.

According to Reuters, Mattarella wants Parliament to draft a new electoral law before any ballot is held. The next parliamentary elections are in 2018, but there are increasing calls to hold a vote a year earlier.

In the aftermath of the referendum markets largely shrugged off the ‘No’ vote, but shares in Italy's beleaguered banks dropped.

Rome is currently preparing a state bailout for the world's oldest bank, and the country’s third biggest lender, Banca Monte dei Paschi di Siena, which needs to raise €5bn by the end of December to avoid being wound down.

La Stampa reported that Italy could ask for a €15bn European Stability Mechanism loan to help not just Paschi, but also some of the country’s other banks.