ROME - Italian Prime Minister Silvio Berlusconi quit power Saturday to cheering from a crowd of thousands in Rome after a wave of market panic that shook the eurozone and brought his long rule to an end.

Berlusconi submitted his resignation to President Giorgio Napolitano, triggering an explosion of joy in the Italian capital with people uncorking bottles of champagne, dancing in the streets and honking car horns.

"I am deeply embittered," the 75-year-old Berlusconi, who has been in power for 10 of the past 17 years, told reporters after he was greeted following his last cabinet meeting with shouts of "Buffoon!" and "Go Home!"

"Ciao! And above all don't come back!" shouted one man, while another declared: "We are very, very happy!"

"We're all delighted. We've had enough of this person who always acted in his own interests. Italy is headed for a better future," said 50-year-old Tommaso Romito, muffled up in a white scarf on a cold night in Rome.

Napolitano is to hold talks with all political forces from 0800 GMT to about 1700 GMT on Sunday, after which he is expected to nominate former EU commissioner Mario Monti as the head of a new transition government.

Berlusconi's announcement Tuesday that he would resign once parliament approved a package of economic reforms that he had promised the European Union, prompted fears of a prolonged political crisis in the eurozone's third largest economy further dragging down the entire euro area.

Investors are pushing for a new government to be in place by Monday, in time for the opening of the markets.

International Monetary Fund chief Christine Lagarde, US President Barack Obama and French President Nicolas Sarkozy have all called on Italy to move quickly to form an interim government instead of calling early elections.

Speaking on the eve of an Asia-Pacific summit in Hawaii, Obama said: "There is still work to be done in the broader European community to provide markets a strong assurance that countries like Italy will be able to finance their debt."

In a tumultuous parliamentary session that voted through economic reforms including state asset sell-offs and a liberalization of the labor market, opposition lawmakers spoke of their relief at Berlusconi's exit.

"We hope today marks the beginning of a new spring in Italy," said Massimo Donadi, a lawmaker from the opposition Italy of Values party.

Dario Franceschini of the main opposition Democratic Party said: "Today the curtain falls on a long and painful phase of Italian political history.

"The country wants to turn the page and start again," he added.

In the cold streets of central Rome, crowds gathered chanting "Resign! Resign!" and holding up placards reading: "Bye Bye Silvio!". Motorbikes streamed past waving Italian flags and an impromptu choir sang: "Hallelujah!"

There were also smaller groups of Berlusconi supporters who shouted "Silvio! Silvio!". His supporters said they were bereft that their beloved leader was leaving.

His possible replacement, 68-year-old economist Monti, has a formidable reputation. As the former top trust-busting bureaucrat in Brussels, he took on US corporate giants Microsoft and General Electric. But he has no experience in political office.

European Central Bank president Mario Draghi, the former governor of the Bank of Italy who took over in Frankfurt just this month, met Monti in Rome Saturday in what was interpreted as an implicit endorsement.

Monti has received support from across the political spectrum and Berlusconi's People of Freedom (PDL) party said it would also back him.

There was little grief among ordinary Italians at the political demise of Berlusconi, with latest polls giving the media tycoon an approval rating of just 22 percent following a wave of sex scandals and legal troubles.

Many in the international community are also glad to see the back of him.

The latest cover of The Economist news weekly, which has had a long feud with Berlusconi since declaring him "unfit to lead Italy" in 2001, carried a photo of the tycoon preening himself with the headline: "That's all, folks."

Following Berlusconi's resignation announcement on Tuesday, Italy's long-term borrowing costs rose above 7.0 percent -- a dangerous level that could make the country's debt unsustainable within months.

Reports of Monti's impending nomination helped ease the jitters.

But the toxic mix of a 1.9 trillion euro ($2.6 trillion) debt, an extremely low growth rate and high borrowing costs have raised concerns that the eurozone's third largest economy may be forced to seek a bailout.

The IMF and the European Financial Stability Facility have both reportedly offered financial help.

Some economists however have warned that, unlike fellow eurozone members Greece, Ireland and Portugal, Italy may be "too big to bail".