Italy's centre-left political leader, Pier Luigi Bersani has appealed to the country's parliament to resolve the political deadlock which has left the Italian people without a ruling party.
Bersani's party defeated former Italian Prime Minister and centre-right leader Silvio Berlusconi to gain the most seats in the election at the weekend, but failed to gain the Senate - which is necessary to legislate.
The Democratic Party (PD) proposes basic austerity reforms in government and could now try to form a "grand coalition" with Berlusconi or Beppe Grillo - who stunned the country by securing a quarter of the vote on Monday.
Talks between the main parties continued today and are set to resume on Wednesday.
Italy's public and private sector institutions owe nearly $50bn to British banks, figures reveal.
The statistics detail Italy's debt to the UK banking sector as the country remains in a political deadlock with no party securing an overall majority in the country's election.
Britain's banks' external exposure stood at $2.7 trillion in June last year, according to the Bank for International Settlements.
Italy's current debt to the UK is less than the $66bn the country owed at the end of 2010.
The former TV comic whose anti-establishment "non-party" won more votes than any other single party in Italy's deadlocked election has showed no early signs of wanting to negotiate for power.
Beppe Grillo's 5-Star Movement collected almost 8.7 million votes overall, a tally which only trailed the multi-group blocs of the centre-left and centre-right.
Commentators said all his adversaries underestimated the appeal of a grassroots movement that found particular favour with young jobless Italians and others weary with Prime Minister Mario Monti's internationally-endorsed austerity agenda.
Mr Grillo, who mixes fierce attacks on corruption with policies that range from clean energy to free internet, surged in the final weeks of the campaign as hundreds of thousands turned up at his outspoken rallies.
British banks have cut their exposure to the eurozone, but still have billions at stake so any impact from the latest Italian political stalemate on the collective debt will be felt.
But how exposed is the UK?
The Italian stock market has fallen and state borrowing costs have risen as investors took fright at the country's political situation following the surprising election stalemate.
The Milan bourse was down more than four per cent at its opening amid the deadlock.
The spread between yields on 10-year Italian and German government bonds widened to 338.7 basis points, the highest since December 10.
Memories in the world financial markets are still fresh of the crisis in Italy, the eurozone's third-largest economy, that took the 17-member currency bloc to the brink of collapse in 2011.
Silvio Berlusconi has said all parties and alliances must now reflect on what to do next following deadlock in Italy's election, Reuters has reported.
The former prime minister, fronting the centre-right bloc, acknowledged the centre-left coalition led by Pier Luigi Bersani had claimed Italy's lower house.
Berlusconi's bloc narrowly trailed Bersani's coalition in the vote for the Senate upper house, which proved indecisive, meaning no group has earned a clear majority to form a government.
Italy faces an election stalemate after no party or likely alliance claimed the 158 seats needed to form a majority in the upper house of the Senate.
The centre-left coalition led by Pier Luigi Bersani secured a solid majority in the lower house, despite its slim advantage in terms of votes, but fell short in the Senate, which it would need to control in order to pass legislation.
Calculations by the Italian Centre for Electoral Studies, gave 121 seats to Bersani's coalition, 117 to Silvio Berlusconi's centre-right bloc, 54 for the anti-establishment 5-Star Movement of comic Beppe Grillo and 22 to the centrist coalition led by outgoing Prime Minister Mario Monti.
Italy's unclear election result has raised fears for the future health of the Eurozone's third largest economy.
Italian bonds and shares rose initially on Monday as it became likely the centre-left coalition would take control of the lower house.
But that trend is likely to be reversed on Tuesday after Silvio Berlusconi's centre-right coalition appeared to have a narrow lead in the Senate.
A strong protest vote for the anti-austerity candidate Beppe Grillo has also raised fears of a return to instability in Italy and the wider Eurozone.
As ballot papers continue to be counted in Italy, initial poll results show Silvio Berlusconi's centre-right party is currently tied with Luigi Bersani's centre-left party at 30.7%, according to Reuters.