ITALY remained in deadlock today as emergency talks aimed at forming a government three months after the general election appeared to have stalled.

Reports suggested that prime minister-designate Carlo Cottarelli, the ex-IMF official appointed by Italian president Sergio Mattarella on Monday, was reluctant to form a new administration.

A snap election is now a strong possibility, meaning the two right-wing parties that topped the polls in March — Five Star and the League — could bid again to form a coalition government.

With support waning among the public, Italy’s president warned that the election could be seen as a referendum on the country’s continued membership of the EU.

Italy was plunged into political turmoil after Mr Mattarella blocked the two parties from appointing the eurosceptic Paolo Savona as finance minister.

The decision came amid intense pressure from financial markets, with bankers demanding a government that abides by EU economic rules.

Mr Cottarelli is known as “Mr Scissors” for his time as a government minister tasked with slashing public spending.

However, both Five Star and the League have vowed to block the appointment in parliament, and Five Star leader Luigi Di Maio has said he will try to have Mr Mattarella impeached.

Italian Communist Party general secretary Marco Rizzo said the only way out of the country’s crisis is for a “communist revolution.”

Mr Rizzo posted a picture on social media showing him ripping up a pamphlet emblazoned with the EU flag.

“The governmental incident indicates who is in charge in Italy. The EU, IMF and Nato are able to choose ministers. Forward to the battle against capitalist globalisation. The only revolution is the communist one,” he charged.