Defeated Italian prime minister Silvio Berlusconi resigned from government today following weeks of bickering over general election results.
With credit rating agencies pushing for prompt action to tackle the country's struggling economy and wayward public finances, Italy could have a centre-left government led by Mr Prodi in place by the end of the week.
Mr Berlusconi, who had contested the result of the April 9th-10th poll, had an audience with President Carlo Azgelio Ciampi in the early afternoon following a cabinet meeting.
Mr Ciampi (85), whose own term expires in mid-May, has been under pressure to end Italy's post-election political stalemate.
Mr Prodi has said his cabinet team would be ready by Friday, although he made it clear that it was up to Mr Ciampi to decide.
Speakers of both houses of parliament were elected on Saturday. But the four ballots needed in the upper house Senate underscored the difficulties Mr Prodi could have with his slim majority there.