By Crispian Balmer and Angelo Amante
ROME (Reuters) - Italy's prime minister announced his resignation on Tuesday as he made a blistering attack on his own interior minister, Matteo Salvini, accusing him of sinking the ruling coalition and endangering the economy for personal and political gain.
Prime Minister Giuseppe Conte, addressing parliament after it was recalled from its summer recess to decide the future of the 14-month-old government, accused League party chief Salvini of seeking to cash in on his rising popularity.
"(Salvini) has shown that he is following his own interests and those of his party," Conte told a packed Senate, a stony-faced Salvini sitting by his side. "His decisions pose serious risks for this country."
He described the actions of Salvini, who declared the coalition unworkable 12 days ago and called for snap elections, as recklessness "liable to tip the country into a spiral of political uncertainty and financial instability".
Conte, who belongs to neither of the coalition's two parties, said he would hand in his resignation later in the day, allowing the head of state to start formal consultations with parties to see if a new coalition can be formed.
Failing that, President Sergio Mattarella would have to dissolve parliament, 3-1/2 years ahead of schedule, a move that could trigger elections as early as the autumn.
Financial markets rallied on Conte's resignation, seemingly hopeful that snap polls could be avoided amid reports the ruling 5-Star Movement might seek an alliance with the center-left opposition Democratic Party (PD).
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Salvini at times shook his head, rolled his eyes or nodded to League senators as the prime minister accused him of being "irresponsible", "reckless", "alarming" and "disrespectful".
Conte said he was worried by Salvini's threat to call people into the country's squares if his drive for elections were thwarted, as well as his demand for "full powers".
"We do not need men who have 'full powers', but people who have institutional culture and a sense of responsibility," he said in an hour long speech in which he also denounced Salvini's habit of brandishing the cross at his political rallies.
Salvini rejected Conte's comments, saying other parties were afraid of going to elections and losing their influence.
He said his political goal was to challenge the European Union's fiscal rules, which he has blamed for impoverishing the country. Rome should spend at least 50 billion euros ($55 billion) to stimulate the chronically weak economy, he added.
"I am not afraid," he said "I don't want Italy to be a slave to anyone, and I don't want Italy to be given a long chain like a little dog. I don't want any chain at all."
Italy has not held an election in the autumn since World War Two because the final months of the year are traditionally dedicated to drawing up the budget -- a key moment for a country with one of the world's largest debt mountains.
Salvini said he was ready to keep the coalition alive to approve a 2020 budget and also vote in a planned reform of parliament before heading to early elections.
"Do you want to cut the number of parliamentarians and then go to vote? We're ready for that. If you then want to present a courageous budget, then we are ready for that too," he said.
However, such a scenario is hard to imagine given the mutual recriminations flying between the two coalition partners.
Instead, Mattarella is likely to push for a swift decision by the 5-Star and PD on whether they can work together. Failing that, he will probably dissolve parliament and call a vote in late October or early November.
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