Berlusconi loyalists hope to secure a compromise before an expected Senate vote this month that might bar Berlusconi from Parliament but not necessarily stop him from retaining his leadership of the People of Liberty Party.
An expulsion from Parliament could, however, hasten Belusconi's exit from the party amid signs support for the 77-year-old politician within his party is waning at last.
The media and construction magnate has dominated Italian politics since the mid-1990s.
"Silvio Berlusconi is resigning, albeit in slow motion," Milan daily Corriere della Sera said, pointing out that a swift resolution of the Berlusconi affair would restore confidence in Italian economy and eliminate Brussels' back-biting over the country's current troubles.
The newspaper took a swipe at European Union spokesmen who "take the liberty of handing down dismissive opinions on Italy's prospects, confirming that Silvio Berlusconi is now treated as a convenient scapegoat."
Berlusconi was convicted of tax fraud in August and faces jail. Analysts say his sentence may be reduced to house arrest or community service because of his age.
Berlusconi has also been convicted of paying for sex with an underage prostitute and breach of confidentiality related to a police wiretap. He has appealed those convictions as well.
Berlusconi's expulsion from the Senate is likely to be carried out under a controversial law aimed at cleaning up Italian politics. Critics of the legislation, passed last year, say it sets a bad precedent, while supporters say Italy needs to take tough action against politicians accused of criminality after many years of turning a blind eye.
Opinion on Berlusconi's likely expulsion remains split, partly because the Senate panel that voted for his expulsion was largely made up of left-wing politicians while Berlusconi is still prized as a center-right heavyweight by Italy's conservatives.
Corriere della Sera said the period before the Senate vote could prove an ordeal for Prime Minister Enrico Letta's fragile coalition, especially if the government was seen to be dragging its feet on Berlusconi's conviction.
The Financial Times said Berlusconi's climbdown and short-lived challenge to Letta would help stabilize the economy, and cited positive investor response to this week's events.
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