Matteo Renzi resigns: Italy's PM stands down after crushing 20-point defeat in referendum

Italian Prime Minister Matteo Renzi has announced his resignation, saying he takes full responsibility for the "extraordinarily clear defeat" of his package of constitutional reforms in Sunday's referendum.

With more than 90 per cent of the results in, the "No" campaign led with almost 60 per cent of the vote to slightly over 40 per cent for "Yes", on course to achieve the upper estimate predicted by exit polls.

Mr Renzi had conflated his centrist leadership with a "Yes" vote and promised to step down if he lost, and called a news conference in Rome as the result became clear.

Addressing the nation at the Palazzo Chigi on Sunday night, Mr Renzi declared that his "experience of government finishes here".

"We tried, we gave Italians a chance to change but we didn't make it," he said. "We wanted to win not to take part in the competition.

"I lost. I can admit it and I am sorry. I was not able to lead you to the victory.

"Good luck to us all," he concluded.

Financial markets reacted immediately to the referendum result, as the euro fell sharply in value against the dollar. It continued to fall upon Mr Renzi's announcement, at one stage hitting $1.0507, its lowest level since March 2015. There are concerns the "No" vote could boost the prospects of opposition groups who are against keeping Italy in the eurozone.

Mr Renzi said he would visit President Sergio Mattarella on Monday to formally hand in his resignation following a final meeting of his cabinet.

Mr Mattarella will then be tasked with brokering the appointment of a new government or, if he is unable do that, ordering early elections.

Most political analysts see the most likely scenario being that Renzi's administration will be replaced by a caretaker one dominated by his Democratic Party, which will carry on until an election due to take place by the spring of 2018.

Angelino Alfano, Italy's Interior minister and a Yes supporter, said on Twitter: "Together with million of Italians we played a good game but we lost it. It was good to play it and was the right thing for Italy.”

Former Prime Minister of Italy Silvio Berlusconi, who supported the No vote, called for a meeting to change electoral laws and bring about new elections as soon as possible. He was due to speak officially and in more detail on Monday.

The reaction in Italy was one of shock - perhaps not at the result itself, but at the scale of Mr Renzi's defeat. The "No" victory was even greater than gloomy opinion polls had indicated up until 18 November, after which the media were banned from publishing survey results.

Amid speculation about what turnout could do to the result, in the end the number of people voting was remarkably high, with the Interior Ministry's website putting it at 68.33 per cent, indicating the final turnout could be more than 70 per cent.

Mr Renzi had gone into the final weekend of the campaign insisting he could still win voters around but he acknowledged he had failed on Sunday night. "The Italian people spoke today in unequivocal fashion," he said.

Mr Renzi, who came to power two years ago aged just 39, aimed to streamline Italy’s political system so he could push through a major economic reform package. He wanted to reduce the number of senators and limit the senate’s power relative to the lower house of parliament.

The populist Five Star Movement, led by comedian and Donald Trump admirer Beppe Grillo, backed the No position, portraying it as a protest vote against Mr Renzi's status quo and Sunday's vote presented a major victory to the party.

Prominent Five Star figure Alessandro Di Battista said in a press conference following the result: “We can change our constitution now to give more power to citizens.

"We want to thank voters for choosing 'No', but now it's time to stop saying that [Five Star] is an anti-politics movement.

"We defended the values of the Italian constitution. If there is an anti-politics party it is the Democratic Party, not us."

Opposition parties had denounced the proposed amendments to the 68-year-old constitution as dangerous for democracy because they would have removed important checks and balances on executive power.

Yet few dispute that economic reforms are necessary: the Italian economy has essentially gone nowhere for 16 years and unemployment is high at 11.5 per cent. With the exception of Greece, Italy has had the worst performance of any eurozone country since the 2008 financial crisis.

The result means it is likely new elections will be called, making it conceivable that the Five Star Movement could come to power. The party is currently on around 28 per cent in the polls, not far behind Mr Renzi’s Democratic party, which has a 32 per cent share. If in power, Five Star has said it would hold a referendum to decide whether Italy should leave the eurozone.

But the fact that they all united to fight Mr Renzi's constitutional changes does not mean Italy's opposition is any more united on other matters.

Speaking to La7 TV in the wake of the result, Matteo Salvini, leader of the anti-immigrant Lega Nord, said: "Even if we fought together with parties like Five Star Movement and some left-wing parties supporting 'No' and the result reflects the will of the people, we don't share with those parties the same political views regarding refugees and the role of Italy in Europe."

Asked if there were any parallels to be drawn between the referendum and the UK's Brexit vote, Five Star's Luigi Di Maio said: “We're not going to leave EU, we're leaving Renzi's era.”