President Sergio Mattarella announced Monday that there are only two options to find a new government: either political parties accept a caretaker government until December and elections take place afterwards; or Italy heads to a new vote in July or in the fall. But given Mattarella's refusal to give Salvini the mandate, Berlusconi said he wouldn't stand in the way of the League taking responsibility to try to form a government with the 5-Stars.
The talks were agreed by Sergio Mattarella, Italy's president, after the two leaders asked for more time to reach a deal and avert a caretaker administration and a fresh election.
Prospects are growing of an unprecedented summer re-vote which opinion polls suggest would see Forza Italia haemorrhaging vote to the increasingly buoyant League, which is the dominant partner in the conservative bloc.
In a joint statement after meeting on Thursday, Mr Di Maio and Mr Salvini described a "positive climate to define the government's agenda and priorities" and said "technical" meetings among staff would begin in the afternoon. "We'll start with the issues and then we'll move on to names" of ministers, he said.
"To think that one can go it alone in Europe is knowingly deceptive in front of public opinion", Mattarella said in a pointedly pro-European speech at a conference on the state of the European Union in the central town of Fiesole.
The four-time premier, who had previously opposed a Five Star-League tie-up, said he would respect a decision of "another political force of the center-right to create a government with Five Star". He said his party would "loyally support" laws in line with the center-right's program.
Although The League and 5-Star have failed to agree on forming a coalition between themselves after the March elections, they have enough votes together in parliament to block any other government from taking office.
"A political government is now more probable, and a mild negative market reaction is likely tomorrow", said Vincenzo Longo, an analyst at IG Markets.
The same survey showed 5-Star and the Democratic Party (PD), which has ruled for the last five years, broadly unchanged from their March 4 results on 32 percent and 19 percent respectively.
The M5S, too, appears to have softened its stance, with leader Luigi Di Maio telling journalists: "There's not a veto on Berlusconi, just willingness to talk to the League". "Let the parties decide of their own free will if they should give full powers to a government... or else new elections in the month of July or the autumn".