Italy's anti-establishment Five Star Movement (M5S) and the centre-left opposition Democratic Party (PD) agreed on Wednesday to form a new coalition government and avoid snap elections which could favour Matteo Salvini's far-right League Party.

The two parties entered coalition talks, despite being political enemies, after Italy's former ruling alliance — made up of M5S and the League Party — collapsed following months of infighting.

Hoping to seize on his rise in popularity, Salvini pushed for new elections in recent months, saying that the alliance between his hardline League and the Five Star Movement no longer held a parliamentary majority.

However, Salvini's plan inevitably backfired as he was sidelined from the ruling alliance by the M5S and PD on Wednesday night.

Nicola Zingaretti, the head of PD, said Wednesday that the coalition is a “real turning point” for Italy and stressed that it was “not just a handover of power.”

“We love Italy and we believe that it is worth trying this experiment,” Zingaretti told reporters.

M5S and PD leaders told Italy's President Sergio Mattarella that Giuseppe Conte should lead the new government once again. Conte had resigned as prime minister last week, effectively averting a no-confidence vote tabled by Salvini.

Mattarella's spokesman, Giovanni Grasso, said Wednesday evening that Conte had been invited to meet with the President on Thursday morning. Conte is expected to be given the mandate to form a new government.

“The only thing that unites them (M5S and PD) is their hatred of the League,” Salvini said bitterly as he addressed reporters on Wednesday evening.

“The truth is that 60 million Italians are being held hostage by 100 parliamentarians who are dead scared of losing their seats.”

According to M5S leader Luigi Di Maio, the deal still needs to be approved by party members in an online vote — which should take place before the end of next week.

The backdrop

In a speech last week, Conte slammed Salvini for what he described as a lack of statesmanship and said his decision to force a vote could bring about institutional and financial uncertainty.

“Asking citizens to vote every year is irresponsible,” Conte added.

Salvini took the microphone immediately after Conte finished his speech in the Senate, saying that he would “do what I did all over again,” adding: “I am a free man. I am not afraid of the judgment of Italians.”

He said he wanted to offer Italians a “future of growth and prosperity.”

Salvini also defended his policies on Europe and immigration, which caused the coalition to fall apart.

“Are we or are we not a sovereign country, free to protect its borders, its beaches!” he said.

Salvini later tweeted: “We'll see if anyone has made arrangements if someone wants to govern. The alternative? The vote.”

Why the government fell apart

Conte, a law professor who had never held political office prior to his appointment, became prime minister in June 2018, the compromise choice to lead a populist coalition government between the League and Five Star Movement, whose leaders campaigned on anti-immigrant and eurosceptic platforms in their push to power.

While Conte nominally held the most powerful office in Italy, the driving forces in his administration have been the leaders of those two parties that secured the most votes in the March 2018 election. But their coalition fell apart this month over disagreements on key policies.

Those disputes reached fever pitch last week, as the two parties engaged in a bitter political standoff over a migrant ship that was stranded off Italy for 19 days.

Earlier in August, tensions between the two parties rose after a split vote over a planned high-speed rail link between Turin in Italy and Lyon in France, a project that the League favoured.

The turmoil comes at a difficult time as Italy's parliament must approve and present its draft budget to European Union leaders in Brussels by mid-October.