The leader of Italy's biggest political party has called for the president to be impeached after he vetoed a choice for finance minister.
Luigi Di Maio of the populist Five Star Party said President Sergio Mattarella had caused an "institutional crisis".
Efforts by PM-designate Giuseppe Conte to form a government collapsed on Sunday after Mr Mattarella rejected eurosceptic candidate Paolo Savona.
Five Star had been trying to form a government with the right-wing League.
Italy has been without a government since elections in March because no political group can form a majority.
Mr Conte has now stepped down and correspondents say President Mattarella has been in talks with former IMF economist Carlo Cottarelli, who is tipped as a potential stop-gap prime minister.
But the BBC's James Reynolds in Rome says such an arrangement is unlikely to last and early elections may have to be called.
There is now a real argument between the president and the populists about Italy's position in the EU, he adds.