Now for Italexit! Europe battered by another anti-establishment revolt as polls predict landslide defeat for Italian PM Mateo Renzi in referendum campaign that could now gift power to populists committed to taking the country out of the euro

Europe was rocked again last night after the latest populist surge against Brussels.

The Italian prime minister was swept from power after calling a referendum on constitutional reforms, which became a vote on confidence in his government.

Matteo Renzi resigned shortly after exit polls indicated a clear defeat, saying: ‘I accept all responsibility for this loss. I’ll say it out loud.’

The result is a further landmark victory for populist movements, following Britain’s vote for Brexit and Donald Trump’s election win in the US.

Mr Renzi’s opponent Beppe Grillo had urged voters to ‘go with your gut not your brain’ and had called for Italy to ditch the euro.  

The prospects of an Italian vote on leaving the single currency – and by extension the EU itself – now draw closer. 

Markets were braced for a turbulent day today, with the country already facing a major banking crisis.

What should have been a referendum on changes to the upper house of the Italian Parliament had escalated into a vote on Mr Renzi’s handling of the crises confronting Italy – economic meltdown and record numbers of migrants.

Having already pledged to step down in the event of a No vote, Mr Renzi’s departure will create fresh political instability at home and give fresh momentum to anti-establishment movements across the West.

Mr Renzi said he felt bitterness, rage, sadness and disappointment when he conceded the referendum, adding: ‘I’d like to hug each and every one of you.  

‘We had a chance, but we were not able to convince the majority of our citizens. 

‘We had millions of votes, which is impressive, but not enough. 

‘I accept all responsibility. 

‘He who fights for an idea cannot lose

‘The experience with my government will end here. 

‘You can’t pretend for the thousandth time that everything will remain. 

‘I wanted to change. 

‘I wasn’t able to do so [deliver change to Italy], so therefore I will have to leave.’

In an emotional press conference, he said he did all he could, but will resign officially tomorrow when he meets his colleagues.  

The result will reduce the senate’s influence and withdraw power from 20 regional governments in the country, gifting power to populists committed to taking the country out of the euro who argue the country’s economy has stagnated since joining the currency nearly 15 years ago.

An exit poll by the Piepoli Institute/IPR for state television station RAI, estimated the ‘No’ vote at 54-58 percent against 42-46 percent for ‘Yes’. 

Two other polls gave ‘No’ a similar lead of at least 10 points. 

Voting ended at 11 p.m.

The euro immediately fell against the dollar on the exit polls, slipping to $1.0580 from $1.0625.

The rejection represents a fresh blow to the European Union which is struggling to overcome an array of crises and was eager for Renzi to continue his reform drive in the euro zone’s heavily indebted, third-largest economy.

Italy s proposing to run a budget deficit of 2.4 percent of GDP for the year, significantly higher than the 1.8 percent level it had promised to deliver earlier this year.

Deputies on Friday voted overwhelmingly in favour of a draft 2017 budget that the European Commission has warned will breach EU rules on the management of public finances. 

Luca Comodo, director at polling company Ipsos, told the paper voters think blocking the government’s plans is a vote against the establishment and said: ‘The south is where protest and rage are amplified.’ 

The issue has provoked sharp exchanges in recent weeks with Renzi seen in some quarters as Brussels-bashing in the run-up to a December 4 referendum on constitutional reform, on which he has staked his political future.

New spending plans in the budget include two billion euros more for healthcare, one billion for education and measues to help small companies and poorer families.

Renzi said earlier this month that he would no longer bow to ‘diktats’ from Brussels over fiscal restraints he regards as counterproductive at a time when most of the eurozone is struggling.

He has also threatened to block the approval of the EU institutions’ collective budget if other countries do not offer Italy more help in coping with the arrival of thousands of migrants on its southern shores.

A 2017 deficit of 2.4 percent of GDP would leave Italy comfortably within the EU ceiling of three percent.

But the Commission’s economists say Rome should bring down its deficit faster to ensure that the upward trend in the country’s huge debt mountain – equivalent to over 130 percent of GDP – is reversed.

The 2017 budget law will only be definitively approved once it has been examined by the second chamber of parliament, the Senate, which has not scheduled any debate on it until after the referendum.

Former Italian Prime Minister Silvio Berlusconi cast his ballot to reject the reforms.

He shook hands with election officials and posed for photographers after voting in the capital, Rome.

Berlusconi’s Forza Italia party is largely in disarray, with a tax fraud conviction keeping the 80-year-old centre-Right leader out of public office.