Economist Mario Monti tonight agreed to try to form a new government as Italy tries to avoid financial disaster.

Presidential palace officials announced that the former European Union competition commissioner received the formal mandate from President Giorgio Napolitano.

Mr Monti must now draw up a Cabinet, lay out his priorities and see if he has enough support in Parliament to govern effectively.

Hours earlier, Silvio Berlusconi's party gave its crucial appproval for Mr Monti to assemble a government, but insisted that it last only long enough to implement urgently need economic reforms.

Berlusconi resigned reluctantly yesterday, bowing to market pressures.

Mr Monti said he will get to work quickly to try to form a new government, assuring the nation that it can heal its disastrous finances.

He told reporters he will carry out the task "with a great sense of responsibility and service toward this nation".

He added that Italy must "heal its finances" and resume growth because today's leaders owe it to future generations.