The Italian parliament's lower chamber today backed an austerity reform package demanded by the EU, paving the way for Prime Minister Silvio Berlusconi to quit.

It is expected that President Giorgio Napolitano will ask respected economist Mario Monti to succeed him.

The Chamber of Deputies passed the measures a day after the Senate cleared them.

Mr Berlusconi has promised to resign once the legislation passed, and a final Cabinet meeting was scheduled tonight.

Mr Berlusconi was expected to tender his resignation to Mr Napolitano soon after.

Italy is under intense market pressure to quickly put in place an effective new government to replace him, one that can push through more painful reforms to cut debt and spur growth.

Mr Napolitano appealed for MPs to put the good of the country ahead of short-term, local interests - an indirect appeal to members of Mr Berlusconi's party and the allied Northern League to work with the new government.

"All political forces must act with a sense of responsibility," he said.

The Chamber of Deputies, with a vote of 380-26 with two abstentions, approved economic reforms which include increasing the retirement age starting in 2026 but do nothing to open up Italy's inflexible labour market.

Mr Berlusconi chaired his final Cabinet meeting this evening, after which he was expected to head to Mr Napolitano's palazzo to tender his resignation.

Mr Berlusconi stood as MPs applauded him in the parliament chamber immediately after the vote. But outside his office, hundreds of curiosity-seekers massed to witness the final hours of his government.

"Finally" read one of the signs held up in the crowd. "Grazie Napolitano," said another - an indication that, like financial markets, many ordinary Italians had come to the conclusion it was time for Mr Berlusconi to go.