Mr Berlusconi has been locked in a bitter feud with friend-turned-foe Gianfranco Fini, who has the numbers to bring the government down and is widely expected do so in a few weeks, when Mr Berlusconi faces confidence votes in parliament.
Yesterday, Mr Fini withdrew his delegation from the government - EU affairs minister Andrea Ronchi, deputy industry minister Adolfo Urso and two undersecretaries.
"The resignations are irrevocable," Mr Urso said. "We want to end a political phase and … open a new one.
"We all agree today that we need to move to a new phase in the Italian centre-right."
Responding to the resignations, welfare minister Maurizio Sacconi, a Berlusconi loyalist, said: "With the withdrawal of Fini's government members, the betrayal has begun."
Mr Fini, a charismatic right-wing leader and the co-founder with Mr Berlusconi of the People of Freedom party, had a spectacular fallout with the premier last summer.
He was effectively expelled from the party, and created a breakaway parliamentary group.
His grip on power loosening, Mr Berlusconi faces confidence votes in parliament after lawmakers pass the budget, which is likely to be in mid-December.
Many analysts predict he will not survive the test, and in the ever-shifting Italian political landscape, many politicians are already plotting their next moves.
While Mr Berlusconi still has a majority in the Senate, if a slim one, it is in the lower house that he risks more as his coalition does not have a majority without Mr Fini's votes.
Mr Fini, who also serves as speaker of the lower house, has repeatedly said he considers the current government to be effectively over.
If Mr Berlusconi loses the vote of confidence, even in one house alone, he has to resign, opening up the possibility of early elections - likely to be next spring, two years ahead of schedule.
But before dissolving parliament and calling an election, the president of the republic can ask Mr Berlusconi to form a new government or even approach a new prime minister to lead a new government with a revised centre-right coalition.
However, Mr Berlusconi has rejected the possibility of there being a government led by another personality from his own coalition, maintaining that this would betray the will of voters, who in 2008 voted him into power.
Defiant in the face of his plummeting popularity, Mr Berlusconi insists that if his government falls, the only alternative is an early election.He claims he would win it again, as part of a coalition with current government partner the Northern League.
"Don't read the newspapers," Mr Berlusconi told supporters in Milan this weekend. "Sixty per cent (of voters] are with me."
While Mr Berlusconi can never be written off, and the appeal of his rivals to voters remains to be seen, the premier's image has been damaged by a spate of scandals in the last two years.
In the most recent one, he has come under scrutiny over his ties to an underage Moroccan girl, nicknamed Ruby Rubacuori (or "Ruby the Heart-Stealer") and alleged encounters with a prostitute.
His rivals have also attacked his unrepentantly lavish lifestyle, saying that a public figure should set an example and insisting he was failing to attend to the country's economic troubles.
The escalating crisis has come at a particularly sensitive moment in which the eurozone debt crisis has picked up in intensity with renewed worries over the Republic of Ireland spilling over to affect other countries, including Italy.
Italy, one of the most heavily indebted states in the 27-member zone, has so far avoided the turmoil hitting countries including Ireland or Greece, but politicians on all sides are acutely aware of the danger that markets may be unnerved by prolonged political uncertainty.