ROME, April 20 (Xinhuanet) -- Italian Prime Minister Silvio Berlusconi handed in his resignation Wednesday to President Carlo Azeglio Ciampi and pledged to quickly form a new government to tackle the worst political crisis in his four-year tenure.

    The Presidential Palace said in a statement that Berlusconi has tendered the resignation of his cabinet, but did not specify whether the president has accepted it or not.

    The president asked Berlusconi and his cabinet colleagues to stay in their posts till Thursday, when more discussions are scheduled to be held, the statement said.

    The center-right leader Berlusconi, the country's longest-serving premier in post-war history, had long been under pressure to resign since his party suffered a stunning defeat in regional elections earlier this month.

    Berlusconi announced his resignation earlier in the day to the Senate, but stressed that he aimed to remain in power with the same coalition for a full five-year term but would overhaul his program in the wake of the heavy local election defeat.

    "I accept the challenge of forming a new government," he told the parliament, bowing to demands from two coalition partners who threatened to withdraw their support unless Berlusconi resigned and formed a new government with a revamped government program.

    He said he had assurances from the four main parties in his center-right coalition, including the Union of Christian Democrats(UDC) and right-wing National Alliance (AN) that they will support his reshuffled government.

    Under the Italian constitution, a prime minister must formally resign if he plans a major cabinet reshuffle, although Berlusconi told the press that his reshuffle would be small.

    In his speech to the Senate, Berlusconi said: "I have understood the signal ... but am confident that this difficult moment can be overcome." "I am certain we will complete the mandate that voters have given us."

    "To re-launch our efforts, I plan to update our program, increase our strength to protect the purchasing power of families,to support our businesses and to ensure renewed and certain development in the south," said the media magnate.

    The turmoil came when the UDC quit the government last week. OnTuesday, the AN, led by Foreign Minister Gianfranco Fini, threatened to do the same unless Berlusconi revamped his policy agenda and formed a new government.

    Berlusconi's resignation was welcomed by his allies. "His speech was excellent," said Fini.

    Once a government resigns, it is up to the president to designate a candidate to try to form a new one or else dissolve the parliament and call early elections. Ciampi is likely to give Berlusconi a new mandate.

    Analysts said Berlusconi still faces a huge uphill struggle to improve his government's standing and try to win the next general election due to be held in spring 2006.

    The economy has barely grown since Berlusconi swept to power in 2001 on a pledge of lower taxes. Opinion polls show a clear lead for the center-left opposition led by former European Commission President Romano Prodi.

    But analysts also said Berlusconi still has his chance since "the center-left is only five points ahead in the polls and a year gives him (Berlusconi) a long time to close that gap." Enditem