Berlusconi´s defiance over the possible expulsion, in an unprecedented case for Europe, has put on edge the coalition between Letta´s centre-left Democratic Party (PD) and Berlusconi´s centre-right People of Freedom (PDL) party.[break]
As the eurozone´s third biggest economy struggles to extricate itself from a recession that has led to record unemployment, the 76-year-old Berlusconi has once again taken the political centre stage.
The billionaire tycoon is now complaining a new law against criminals in parliament adopted last year with the aim of cleaning up Italian politics and approved with votes from his own party violates his rights.
The three-time prime minister has appealed to the European Court of Human Rights in Strasbourg, arguing the law should not apply for convictions relating to crimes committed before its adoption, as in his case.
A Senate committee is set to meet at 1300 GMT to discuss his ejection, even though stalling tactics from Berlusconi´s supporters could drag the process on for months before a compulsory final Senate vote.
Appeals to Italy´s Constitutional Court or to the European court could slow down the procedure further, although there is no precise timeline since this type of confrontation is uncharted territory for Italy.
The PD´s leadership has said it will vote to apply the law but the PDL argues that Berlusconi should receive "political freedom of movement" since he leads a party for which millions of Italians have voted.
Some of Berlusconi´s critics have pleaded with him to resign voluntarily and spare Italy more embarrassment.
PD leader Guglielmo Epifani has warned Italy risks looking like a "banana republic" internationally.
Nichi Vendola, leader of the leftist SEL party, said the case is "unique for a Western democracy".
"If, after being convicted and sentenced, Berlusconi gets away with it once again, it means he really is stronger than everyone," Antonio Padellaro, editor of the leftist Il Fatto Quotidiano daily, said in an interview with news channel SkyTG24.
Berlusconi could lead his party from outside parliament but expulsion would be a blow as he has been a lawmaker ever since entering politics in 1994.
The stand-off follows a landmark supreme court ruling on August 1 which turned down Berlusconi´s final appeal against the tax fraud conviction and upheld a 12-month sentence of house arrest or community service.
The verdict was the first definitive ruling against him and he is also appealing convictions for having sex with an underage 17-year-old prostitute and abusing his official powers when he was prime minister.
Berlusconi has repeatedly asserted his innocence and accuses prosecutors of having a left-wing bias.
Most political observers agree Berlusconi´s supporters are unlikely to bring down the government, even though they have repeatedly threatened to do so if their leader is expelled from parliament.
Prime Minister Enrico Letta warned on Sunday that political instability "carries a cost".
But in an interview with the BBC, he said he did not believe the PDL would abandon the coalition.
"This is a parliament problem, not a government problem," he said.
Financial markets have held up relatively well and the FTSE Mib stock market index was up 0.30 percent during trading on Monday, while borrowing costs fell in an indication of improved investor confidence.
But tensions are still bound to rise as Berlusconi has shown no sign of backing down despite some of his aides advocating a more humble approach that could earn him a pardon from the Italian presidency.
Letta´s government was only formed between the rival PD and PDL parties after a two-month deadlock that ensued after a general election in February failed to give any party a ruling majority in parliament.
Related story
Berlusconi finalises sale of Italy's AC Milan to Chinese group
