Italian Prime Minister Giovanni Spadolini offered his Cabinet's resignation, but President Sandro Pertini refused to accept it, presidential sources said.
In an unexpected move, the Socialist President exercised his constitutional right to turn down a government's offer of resignation and told Spadolini to place the issue before Parliament.
The five-party coalition government, whose short time of office has been wracked by differences over measures to revive Italy's flagging economy, will remain in power. In refusing the offer of resignation, the President reaffirmed his opposition to what he has called political backstage deals and squabbles causing the fall of governments.
The decision to quit after only 11 weeks in power was made at a Cabinet meeting which confirmed that a split between the Christian Democratic and Socialist Parties, the main pillars of the Spadolini government, was insoluble. The parties split over a verbal fight between Christian Democrat Treasury Minister Beniamino Andreatta and Socialist Finance Minister Rino Formica.
The Cabinet meeting was formally called to finalize amendments to the 1983 Finance Bill - to tackle Italy's 17 percent inflation and huge public sector deficit. But Spadolini had said that the government's survival would be the main issue.