Prime Minister Silvio Berlusconi, the longest-serving leader in postwar Italy, resigned Tuesday to make way for a center-left government led by Romano Prodi that must re-energize a moribund economy.

President Carlo Azeglio Ciampi asked Berlusconi to remain on as caretaker prime minister during their 30-minute meeting at the Quirinale Palace.

"The president of the republic, Carlo Azeglio Ciampi, has met this morning with Premier Silvio Berlusconi, who has handed in the resignation of the Cabinet over which he presides," the president's office said in a statement.

After the meeting, Berlusconi returned to his private residence and told about 20 flag-waving supporters of his Forza Italia party that "everything is fine." He refused to make any other comment.

Berlusconi, leader of the conservatives elected in 2001, had steadfastly refused to concede defeat since the nation's April 9-10 elections. Earlier Tuesday, he presided over a brief Cabinet meeting during which he announced his intention to resign.

"Democracy goes on, sometimes slowly, but it does," Prodi said in welcoming the move. "It is a very important step."

It was not clear if Ciampi would immediately give Prodi — whose center-left coalition scored a narrow election victory over Berlusconi and his conservative allies — the mandate to form a government.

But Ciampi, whose term expires May 18, had indicated he wants the next president to assume that duty.

"I hope the political vacuum doesn't go on for too long," Prodi said.

Prodi said he was still working on his Cabinet lineup, which already has provoked some grumbling in his coalition.

"My aim is to be ready, but I have no date to suggest to President Ciampi," Prodi told reporters Monday.

Ciampi has stressed the need for Italy to quickly revive the country's zero-growth economy. He said political tensions must ease if the nation is to work together on that goal.

Berlusconi had vowed to fight the election results through legal challenges. He also has pledged to lead fierce political opposition in the legislature.

"A cycle is over. These five years are over," Berlusconi's justice minister, Roberto Castelli, told reporters after the Cabinet meeting. "We will go on. We will be the opposition."

Berlusconi still faces potential legal troubles stemming from investigations into possible bribery and tax fraud.

Berlusconi was not immune from prosecution as head of the government, and he would have faced the same risk of indictment had he won the elections. His government had spearheaded a law granting immunity from prosecution to the country's top five officeholders, but the Constitutional Court overturned it.

As a deputy in parliament, Berlusconi enjoys immunity from searches, mail seizure and wiretapping.