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Pier Paolo Cito, Associated Press
A woman ttries a jacket at a second hand clothes market in downtown Rome, Monday, Nov. 7, 2011. Italy's borrowing rates spiked to a new euro high Monday and talk of early elections grew, as pressure mounted on Premier Silvio Berlusconi to resign so a new government could pass the economic reforms that Italy needs avoid a financial disaster.

ROME — Premier Silvio Berlusconi geared up for one of the most critical votes of his long political career Tuesday, as his main ally urged him to resign and Italy's political uncertainty rocked financial markets for yet another day.

Berlusconi did not immediately respond to the demand, but he has repeatedly resisted all calls for his resignation before his term ends in 2013.

Berlusconi's government is under intense pressure to enact quick reforms to shore up Italy's defenses against Europe's raging debt crisis. However, a weak coalition and doubts over Berlusconi's leadership have ignited market fears of a looming Italian financial disaster that could bring down the 17-nation eurozone and shock the global economy.

"We asked him to step aside, take a step to the side," Northern League leader Umberto Bossi told reporters ahead of a key vote in Parliament that could force Berlusconi's resignation. Bossi is the volatile ally who also brought down Berlusconi's first conservative government in 1994.

On the face of it, Tuesday's vote is just a routine measure to approve 2010 state finances, but it has now become a test of Berlusconi's political strength.

Italy's center-left opposition said it would abstain in Tuesday's voting, to make it clear just how fragile Berlusconi's forces in Parliament are. If he is backed by fewer than 316 deputies — or less than half of the 630-member chamber — it would show the prime minister can no longer count on a majority in the lower house of Parliament, even though the government could still mathematically win the vote.

Bossi said the man Berlusconi has already picked as his successor, former Justice Minister Angelino Alfano, should now lead the government.

But it would be up to the Italian president, Giorgio Napolitano, to decide whether to appoint a new leader or dissolve parliament and call early elections. He would likely sound out political leaders before deciding.

Added Bossi: "Today, nothing will happen."

Italy is the eurozone's third-largest economy, with debts of around €1.9 trillion ($2.6 trillion). Representing 17 percent of the eurozone's gross domestic product, it is considered too big for Europe to bail out like the continent already has done for Greece, Portugal and Ireland.

Even worse, a substantial part of Italy's debt needs to be rolled over in the next few years — the nation needs to raise €300 billion ($412 billion) in 2012 alone — just as interest rates for it to borrow have been soaring.

Italy's borrowing rates spiked Tuesday to their highest level since the euro was established in 1999. By mid-afternoon, the yield on Italy's ten-year bonds was up 0.08 percentage point at 6.62 percent, down from an earlier high of 6.74 percent. A rate of over 7 percent is considered unsustainable and proved to be the trigger point that forced the other three eurozone nations into accepting financial bailouts.

Even the business leaders who once enthusiastically backed the media mogul's leadership have been upset for months, saying Berlusconi's government has failed to revive Italy's stalled economy.

"(Italy) cannot go forward" with the soaring spread. "The country cannot stay in these conditions," said Emma Marcegaglia, who leads a politically influential Italian business lobby.

The opposition center-left has long demanded the 75-year-old leader's resignation, citing sex scandals, criminal prosecutions and legislative priorities it says are aimed at protecting his own business interests rather than those of the country. However, it has failed to come up with a leader who can unite the opposition.

Berlusconi appeared to be frantically trying to line up vote after vote, with at least two party dissenters visiting his Rome residence Tuesday as parliament resumed debate ahead of the vote.

One, lawmaker Isabella Bertolini, told reporters upon leaving she would vote in favor of the government. She said Berlusconi had laid out for her "all the possibilities and options that he's evaluating: Stay, step back, step aside."

Finance Minister Giulio Tremonti hurriedly left a eurozone finance ministers meeting in Brussels to get back to Rome for the vote.

But at least one deputy from Berlusconi's People of Freedom Party won't be there. Lawmaker Alfonso Papa, who is being investigated in a corruption scandal, is under house arrest.

If he gets through Tuesday's hurdle, Berlusconi has indicated next week's vote on the austerity measures would be a confidence vote. If it loses that, he would have to resign.

Antonio Di Pietro, a leader of a small center-left opposition party, told Sky TG24 TV that Berlusconi's "political adventure has been over for a while now." However, he doubted that Berlusconi would voluntarily leave.

One of Berlusconi's closest allies, lawmaker Francesco Cicchitto, told reporters that coalition leaders will take stock immediately after the vote.

"One thing at a time. First the vote, let's let it happen. Then we'll reflect," he said.

International financial officials and the markets, meanwhile, fretted over how long it was going to take for Italian lawmakers to approve measures promised weeks ago by Berlusconi to rein in Italy's galloping public debt.

"I'm not making any judgment on Mr. Berlusconi personally. But I think there is a problem of confidence," French Foreign Minister Alain Juppe told French radio RTL.

During a G-20 summit last week, Berlusconi had to take the humiliating step of asking the International Monetary Fund to monitor the country's reform efforts. On Wednesday, a separate European Union monitoring mission is to begin work in Rome to review financial reforms taken so far.

Barry contributed from Milan. Angela Charlton reported from Paris.