[attach id=244321 size="medium"]Italy’s Prime Minister Mario Monti. Photo: Reuters[/attach]

Italy’s caretaker Prime Minister Mario Monti, looking tired and distraught, said yesterday he was ready to leave office a day after a member of his government resigned over the handling of a dispute with India.

Foreign Minister Giulio Terzi – without informing Monti of his intentions – announced his resignation on Tuesday, saying he disagreed with the Government’s decision to send two marines accused of murder to India to stand trial.

The confused handling of the dispute surrounding the marines, who are accused of shooting two Indian fishermen during anti-piracy duty, has been a black mark on Monti’s 17-month government and led to accusations that it cost Italy diplomatic prestige.

“This Government can’t wait to be relieved of its duty,” Monti said during testimony about the Indian affair to the lower house of parliament. Monti was interrupted repeatedly by heckles from right-wing lawmakers.

Only a year ago, Monti was hailed as the saviour of Italy for pulling the eurozone’s third-biggest economy back from the brink of a Greek-style debt default.

But his decision to enter politics by competing in last month’s elections has turned him into a scapegoat for Italy’s multiple economic problems, including rising unemployment and the longest recession in two decades.

Monti’s centrist alliance gathered just over 10 per cent of last month’s national vote, coming in fourth place in a contest in which no single force won a workable majority in parliament.

As foreseen by law, Monti has remained in power to take care of routine business and will stay until a new government is formed. When that will be is hard to say and Italy is still in a political limbo.

With at most months or more likely weeks left in office, Terzi’s decision to resign suggested the administration of technocrats was beginning to fall apart, something which Monti himself hinted at.

Behind Terzi’s resignation are “other goals that could become more clear in coming months,” Monti said, echoing speculation in several Italian newspapers that Terzi’s resignation was linked to his political ambitions.

Nichi Vendola, leader of the Left Ecology Freedom party said Terzi’s resignation was “the definitive collapse” for Monti, whom the widely followed political gossip blog Dagospia described as “politically dead”.

During the election campaign, Monti was widely criticized for having introduced tough austerity measures that worsened an already deep recession but failed to trim debt.

Though his goal when he took office was to balance the budget by this year, last week his government announced it would raise its 2013 deficit target by half of a percentage point to 2.9 per cent of gross domestic product.