As the final act of Silvio Berlusconi’s political career was being dramatically played out in Parliament on Tuesday, the one-time cruise ship crooner for once looked like a spectator, instead of the showman he considers himself to be.

Italy’s longest-serving prime minister looked on grimly as MPs from his own party joined the opposition’s ranks to ignore a crucial budget measure — leaving only 308 to vote in favour of the bill with an incredible 321 absentees and one formal abstention.

The prime minister’s once formidable majority was in disarray and he had failed to win back several disillusioned loyalists who publicly abandoned him in the past few days.

But the energetic 75-year-old was not idle.  He was jotting down comments and reminders in his notepad on the floor of the house. Perhaps a reminder to comfort the victims of the shocking floods that in the past few days have claimed lives and ravaged thousands of communities in the north from Piedmont to Veneto?

A word of sympathy for the 9000 businesses that have gone belly up so far this year? Or perhaps the eight million Italians now living in poverty?

No. The PM was keeping score, noting the number of  “traditori”, or traitors, who had failed to give him the accolades that he thought he deserved.

As he looked across the vast chamber of the lower house, Berlusconi’s isolation was palpable.

This was not officially a confidence vote and the bill was passed despite the abstentions. But the message was clear and the opposition wasted no time in seizing the moment.

“I ask you, prime minister, with all my strength, to finally take account of the situation. Offer your resignation,” said Pier Luigi Bersani, leader of the main centre-left Democratic Party immediately after the vote. “The government does not have a majority in this house.”

Still the billionaire “bunga bunga” party boy refused to go.  He exited stage right and retired to his lavish palace near Piazza Venezia for talks with his loyal ally and cabinet secretary, Gianni Letta, who himself is now being mooted as an alternative leader.

As Berlusconi bunkered down the already skittish financial markets went berserk, 10-year bond yields surged to new highs of 6.77% and spreads charged to 500 basis points against the German bund while stocks fell and later steadied . Investors were clearly unimpressed and feared Italy was following Greece on the rocky road to economic ruin.

But the Prime Minister had little room to manoeuvre and after a courtesy visit to President Giorgio Napolitano, Berlusconi agreed to resign — but only once the government’s economic reforms are approved. “First the economic stability law and then I will resign,” Berlusconi apparently told the President.

As the beleaguered leader who has dominated Italian politics for the past 17 years discussed his future with coalition partner Umberto Bossi from the Northern League and key ministers at his luxury villa late into the night, there was speculation about how long it would take for the government’s reforms to move through Parliament.

The legislation, which includes reforms promised by Berlusconi to European leaders, is expected to be presented to the Senate later this week and it could be passed within two weeks.

Then Italian voters are likely to be subjected to the kind of political wheeling and dealing they witnessed in the past when coalitions were cobbled together to save fragile leaders that rose and fell like dominoes.  Or we could see a “technocratic” government led by a respected economist such as former European Union Commissioner Mario Monti, at least until elections are called in the new year.

As the curtain falls on the latest drama, a new act will begin on Wednesday when  a delegation from the EU and the European Central Bank is due in Rome to discuss the government’s proposed structural reforms.

“We are very worried about the situation in Italy and the EU-BCE want to help the country to proceed with the reforms,” said EU Commissioner for Economic and Monetary Affairs Olli Rehn on Tuesday. Rehn said Italy needed to see economic reform as soon as possible “with this government or another”.

But many Italians are still not convinced Berlusconi will actually go. “You don’t see him saying sorry,” one savvy young high school student told me late Tuesday. “I will believe it when I see it.”