Draghi tendered his resignation last week after one of the parties in his broad coalition, the 5-Star Movement, refused to back the government in a parliamentary confidence vote.
President Sergio Mattarella rejected his resignation and asked him to address parliament this coming week, hoping he would find a consensus to stave off early elections at a time of international tumult and economic tension.
Draghi comfortably won the confidence vote on a package of measures aimed at alleviating the high cost of living for families and firms. But he said without the full backing of all his partners, his national unity government could not continue.
The populist 5-Star, riven by internal splits, says it has not withdrawn from the coalition, but has called on Draghi to give the group guarantees that he will enact its policy priorities, such as a minimum wage.
“We cannot share the responsibility of government if there is no certainty over the issues that we have underlined,” 5-Star leader Giuseppe Conte said on Facebook late Saturday.
A source in the prime minister's office said Draghi would not bow to any “ultimatums” and remained determined to resign.
But he faced pressure to change his mind amidst warnings that Italy risked losing billions of euros in European Union post-pandemic recovery funds and would struggle to contain climbing energy costs without a fully functioning government.
The mayors of 110 Italian cities, including the top 10 metropolitan areas, said in an open letter they were following the turmoil with “incredulity and concern” and called for all sides to show responsibility.
“We mayors, who are called upon every day to manage and resolve the problems that afflict our citizens,” ask Mario Draghi to go ahead and explain to parliament the good reasons why the government must continue,” they wrote.
An array of industry, farming and trade associations also released statements urging the government to carry on while the head of Italy's largest union said stability was essential.
“I am not taking any sides, but I will say that we have a government that has not lost any confidence vote,” Maurizio Landini, leader of the CGIL group, told La Repubblica daily.
However overcoming growing rancor in government ranks and ploughing on regardless looked increasingly difficult, making national elections in September or October a likely prospect.
Draghi took office in early 2021 tasked with guiding Italy through the COVID-19 emergency. The legislature is due to end in early 2023 and opinion polls suggest a bloc of conservative parties will win a clear majority.
Two of these parties, the League and Forza Italia, are in the coalition and the prospect of victory in an autumn ballot gives them good reason to welcome the collapse of the coalition.
Both groups say they are willing to stay in a Draghi cabinet but only on condition the 5-Star is no longer in the government -- a demand that Draghi has already ruled out.