Italian Prime Minister Silvio Berlusconi said on Tuesday he would resign after suffering a humiliating setback in parliament that showed a party revolt had stripped him of a majority. Berlusconi confirmed a statement from President Giorgio Napolitano that he would step down as soon as parliament passed urgent budget reforms demanded by European leaders after Italy was sucked into epicenter of the euro zone debt crisis. The votes in both houses of parliament are likely this month and they would spell the end of a 17-year dominance of Italy by the flamboyant billionaire media magnate. His failure to implement reforms fueled a party revolt and Berlusconi told his own Canale 5 television station that the only option was an early election. However, this could prolong the uncertainty that has sapped market confidence. Berlusconi's government won a key budget vote after the opposition abstained on Tuesday but failed to secure a majority, obtaining only 308 votes in the 630-seat lower house, eight short of the 316 needed to be sure of passing legislation. Pier Luigi Bersani, the leader of the main opposition Democratic Party, said Italy ran a real risk of losing access to financial markets after political uncertainty pushed yields on government bonds toward a red line of 7%.