Italian centre-left leader Romano Prodi was re-confirmed as prime minister on Friday when he won a second and final confidence vote in parliament, ending a political crisis and ensuring there will be no snap election.
He won by 342 votes to 198 with 2 abstentions in the lower house, a much wider margin than in Wednesday's vote in the Senate, where he remains vulnerable to further defections by allies like one that forced him to resign temporarily last week.
Prodi stepped down after splits in his centre-left coalition lost him a foreign policy vote. He was then instructed by President Giorgio Napolitano to test his majority in parliament to see if he had the support to return to power.
"It was a good vote," Prodi told reporters. "A great margin, but also the debate showed the centre left is much more united than the centre right and that means the government's work will go ahead strongly."
But his fragile grip on power will be tested again in the coming weeks when the Senate, where he has only a wafer-thin majority, votes on financing Italy's military presence in Afghanistan, a mission opposed by some leftist senators.
Prodi declined to comment. It is unlikely he could survive a humiliating defeat on such a vital foreign policy issue.
Former prime minister Silvio Berlusconi, the media tycoon who narrowly lost last year's general election, has forecast that Prodi will not last much longer in power.
A poll this week showed 40% of Italians agreed, predicting his government would last just a few more months.
"You're so ridiculously proud of your self-declared majority, but you don't have enough votes to approve the Afghanistan decree," Berlusconi said in parliament.
But Prodi, buoyed by recent economic data, was on combative form and said his government now had a mandate to push ahead with sometimes unpopular economic policies aimed at increasing competition and making life easier for would-be entrepreneurs.
"We've looked at banks, insurance, public services, energy, professions, public works. We're talking about daily life -- young people who want to open a business without relying on contacts or influence -- we're not talking about small things."
A first wave of reform last year was designed to liberalize trades and professions as diverse as taxi driving, the law, baking and pharmacy, long protected from competition.
"This irritates many sectors who reacted when we took those decisions, but we took them anyway," said Prodi. "And rest assured, we will take more, extremely important ones."
Recent economic data has given Prodi grounds to argue that his reforms are working for the good of Italy.
In 2006, the economy bounced back from stagnation to 2% growth, the strongest since 2000, and the budget deficit looks set to dip below the European Union limit of 3% of gross domestic product this year for the first time since 2002.
Prodi said it was too early to say how much the upturn was structural, but Italy was now on an "upward path".
Berlusconi says the recovery was his work while economists say Italy is riding the coat-tails of a global upturn. Prodi hinted at future tax cuts, usually a centre-right priority.
"We have set aside the resources to get the deficit under control and, we hope, in fact, we're counting on some kind of benefit for citizens from a tax point of view," he said.