Embattled Italian Prime Minister Silvio Berlusconi speaks with Australian PM Julia Gillard at the G20 Summit in Seoul on Friday. ((Andy Rain/Associated Press))

Italy's opposition presented a non-confidence motion against Prime Minister Silvio Berlusconi on Friday, setting the stage for a showdown in parliament that could spell the end of the government.

The opposition Democratic Party and the allied Italy of Values party co-sponsored the motion in the lower Chamber of Deputies. No date has been set for it to be discussed.

Berlusconi's government has been in a tailspin for months, fuelled most recently by allegations of his involvement with prostitutes and a 17-year-old Moroccan girl, and undergirded by two trials against the prime minister, one on corruption charges and the other for alleged tax fraud.

But the political crisis accelerated over the weekend when his estranged ally Gianfranco Fini formally called on him to resign and remake a strengthened coalition. Berlusconi refused.

The non-confidence motion will now force Fini and his confederates, whose support is crucial to the prime minister, to choose whether to support him or bring the government down.

Democratic Party leader Pierlugi Bersani urged Fini and his allied legislators to vote with the opposition, saying: "I would like to believe that all those who think that this phase is finished be coherent and this is the occasion to show it."

Italy's centre-left opposition has to date been unable to capitalize on mounting dissatisfaction with Berlusconi's efforts to pass a law that would spare him and other top office holders from prosecution while in office.

But the 74-year-old Berlusconi's dalliances with younger women have now cost him support from some conservatives and appear to have been the final straw that prompted Fini to issue his weekend ultimatum: resign or face the consequences.

Berlusconi still has an out that would keep him in power: In Italy's Byzantine politics, prime ministers can resign, and have done so, only to receive a new mandate with a strengthened coalition. Berlusconi himself did that during his previous stint in power from 2001 to 2006.