Katya Adler
Europe Editor

Image source, Reuters

Prime Minister Renzi was the only premier left in Europe with a vision for the EU's future. Angela Merkel is too busy crisis-managing while much of France is in thrall to Front National eurosceptics.

But Matteo Renzi is no more. The self-styled reformer with his promise to stabilise politics and kick-start the Italian economy has managed quite the reverse.

Italy wakes up on Monday to the threat of a banking crisis, political turmoil, and a group of anti-establishment populists banging on the doors of government. Eurozone beware and EU be warned. Italy is the euro currency's third largest economy and it is in for a bumpy ride. 

And there are more unpredictable votes to come in 2017: in France, Germany the Netherlands and perhaps here in Italy too.

Mr Renzi's defeat is reminiscent of David Cameron's exit from power after the UK's Brexit vote in June. His departure will be almost as swift.

He will hand in his resignation to President Sergio Mattarella after a final cabinet meeting and then it is all in the hands of the head of state.

He could ask Mr Renzi to form a new government, but the prime minister was pretty clear in his news conference: "My experience of government finishes here," he said.

Mr Mattarella could ask Finance Minister Carlo Padoan or Senate leader Pietro Grasso to form a government to steer Italy through to elections in 2017.

Or he could dissolve parliament and call elections immediately. The Five Star Movement riding high in the polls would be in favour of that, but most other parties would not.

Image source, EPA

Image source, Getty Images

Sunday's referendum had a turnout of 68.48%. That is 31,997,916 people. Of those, 59.95% backed the No vote.

The exceptionally high turnout reflected the high stakes and the intensity of the various issues involved, according to analysts.

But Italians abroad voted largely in favour of Mr Renzi's reforms. With almost three-quarters of the vote counted, 65.55% - or over half a million of them - backed the prime minister.

More Italians live in London than in any other European city outside Italy - here's how the campaign went there.

Investors do not like uncertainty, as the saying goes. So the result of Sunday's referendum could have longer-term implications for Italy's economy.

It is now up to President Sergio Mattarella what happens next. But the big winner from Sunday's vote is the opposition Five Star Movement, an anti-euro group led by the former comedian Beppe Grillo.

There have been growing concerns over financial stability in the eurozone's third largest economy. Italy's economy is 12% smaller than when the financial crisis began in 2008, and its debt-to-GDP ratio, at 133%, is second only to Greece.  

Italy's banks are currently one of the main trouble spots for the eurozone. They are struggling with a burden of bad debt - loans that are unlikely ever to be repaid in full.

Several banks face problems. In the worst case, the failure of a large one could set off a wider financial crisis and set the recovery back. 

Image source, Banca Monte dei Paschi di Siena

PM Renzi wanted to strengthen central government and weaken the Senate, the upper house of parliament.

But his opponents - including some within his own party - had argued that the reforms would give the prime minister too much power.

And the electorate agreed: just under 60% of voters turned their back to the Mr Renzi's plans.

Image source, Reuters

The euro fell to a 20-month low after PM Matteo Renzi said he would resign. The single currency slumped as much as 1.4% to $1.0505, before recovering a bit to $1.0555.

The vote in Italy, the eurozone's third biggest economy, is a new blow to the European Union, already reeling under anti-establishment anger that led to the shock decision of the UK to leave the bloc in a referendum in June.

"It's not very hard to see a new election on the horizon, and it's not very hard to see the (opposition) Five Star Movement taking power with stated aims to either leave the EU, drop the euro, or both," Mark Wills, head of State Street Global Advisors' investment solutions group for the Asia Pacific, told Reuters news agency.

"For Italy, establishing stable governance and a plan to guide the nation is of critical importance given the fragility of the economy, challenging policies and the liquidity problems in the banking system."

The big winner of the night was the anti-establishment Five Star Movement of blogger Beppe Grillo.

Five Star Movement capitalised on Mr Renzi's declining popularity, years of economic stagnation, and the problems caused by tens of thousands of migrants arriving in Italy from Africa.

Beppe Grillo, who called for an election "within a week", tweeted after the result: "A lesson for everyone: you can't lie to the people forever without suffering consequences."

There were scenes of celebration in Rome after Mr Renzi announced his resignation. Some opponents of the reforms gathered outside the Palazzo Chigi.

Image source, AFP

Image source, AFP

Good morning and welcome to our coverage of the dramatic resignation of Italy's Prime Minister Matteo Renzi in a late-night news conference.

His push for a vote on cutting the power and cost of the Senate in Italian politics backfired, as almost 60% of voters roundly rejected the reforms.

"My experience of government finishes here," Mr Renzi told reporters.

Image source, AP