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Italy's Berlusconi to step down

Italian Prime Minister has drawn up a secret pact under which he will resign in December or January, paving the way for a new government in March

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Italian Prime Minister has drawn up a secret pact under which he will resign in December or January, paving the way for a new government in March

Controversial Italian Prime Minister Silvio Berlusconi has agreed to step down after negotiating a deal with coalition allies, it was reported yesterday just hours ahead of a crucial European Union meeting.

Berlusconi (75) is said to have made the agreement with Northern League leader Umberto Bossi, after he agreed to a deal on pension reforms as part of a package to reassure Europe Italy was doing its best to handle the financial crisis.

Italian PM has reportedly told Northern League leader Umberto Bossi that he is ready to hand over power in January

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