Italian Premier Silvio Berlusconi today survived a crucial confidence vote in parliament.

But his narrow majority raises doubts over his ability to govern effectively when Italy needs a steady hand during its economic crisis.

Mr Berlusconi's conservatives won the vote in the lower house by 316 votes to 301, a majority of 15.

After days of tension, the premier's allies clapped when the result of the vote was announced.

Mr Berlusconi has been weakened by sex scandals and criticised for his handling of Italy's economy.

He has been facing repeated calls for his resignation from his political rivals, labour unions and parts of the business community that once considered him their saviour.

Even some of his own allies have openly expressed disappointment, with two deserting the crucial vote today.

Moments after the vote, Mr Berlusconi spoke to reporters about his plan to spur the country's slow growth.

Had he lost the vote of confidence, he would probably have resigned - about one and a half years before the end of his term, in 2013.

Three ratings agencies have downgraded Italy's public debt, citing the country's political gridlock and low growth prospects as key reasons.

"This is bad for Italy and bad for the European financial crisis," said Sony Kapoor, managing director of Re-Define an Economic Think Tank, shortly after the vote.

"The best signal that Italy could have sent to the markets would have been to boot Mr Berlusconi out, but it has failed to do so."

The 75-year-old leader has insisted that there is no alternative to his government, and resisted calls to resign.

He said today that the "ambush" of the opposition had failed, and moments after the vote, he spoke to reporters about his plan to boost Italy's slow growth.