Italian President Giorgio Napolitano has asked centre-left deputy leader Enrico Letta to form a new government, signalling the end of a damaging two-month vacuum since elections in January.

The prime minister designate is expected to quickly select a group of ministers, mixed between politicians and technocrats, under the guidance of Mr Napolitano, whose own unprecedented re-election last weekend opened the way for an end to the crisis.

The new government led by Mr Letta, a former Christian Democrat from the right wing of his Democratic Party (PD), could go to parliament for a vote of confidence by this weekend.

Formation of a government after two months of turbulent political impasse will send a signal Italy might at last be ready to make a start on much-needed reforms.

Accepting his mandate, Mr Letta yesterday said he was surprised by the nomination and felt the profound responsibility on his shoulders.

He said that Italy faced a difficult and fragile situation that could not continue and the government must provide answers on jobs, poverty and the crisis facing small businesses in a deep recession.

He added that European economic policies have been too focused on austerity instead of growth.

Mr Napolitano's choice of Mr Letta, instead of veteran former prime minister Giuliano Amato, indicates a generational change in Italian politics.

Mr Letta, an urbane moderate who speaks fluent English, is 46 years old against Amato's 74, and is an elected member of parliament unlike the older man.

As a staunch pro-European. Mr Letta is likely to be welcomed by foreign governments and markets.

The new government will be backed primarily by Mr Letta's centre-left and the centre-right of Silvio Berlusconi, which had failed to cut a deal following inconclusive elections in late February.