After almost a week of fraught talks, dead-end meetings and irate exchanges, Italy's centre-left leader said on Thursday that he had not been able to find enough support among the country's fractured parliament to form a stable government, prompting the country's octogenarian head of state to take the job of ending the gridlock back into his own hands.

Pier Luigi Bersani, the head of the Democratic party (PD), looked tired and dejected as he explained that the six days of consultations he held with other political parties had not yielded "a successful result". Without naming any names, his brief statement referred pointedly to "objections and conditions" set by others which he had not found acceptable.

The day before, Beppe Grillo, the founder of the Five Star Movement (M5S), had spurned the PD head's latest offer of an olive branch and referred to him and other established political leaders as "whore-mongering fathers". Bersani – who was asked by the president, Giorgio Napolitano, last Friday to see if he could find the numbers for a government – refused to engage with the idea of a "grand coalition" involving the centre-right party of former prime minister Silvio Berlusconi.

The inconclusive results of last month's elections have consigned Italy, the eurozone's third-largest economy, to political paralysis – a condition which is unsettling the markets on the sidelines of the crisis in Cyprus. The spread between Italian 10-year bonds and their German equivalents widened to 350 basis points – around 30 points more than before voters went to the polls almost five weeks ago.

On Friday, Napolitano will take on arguably the biggest challenge of his seven-year term as he holds a series of meetings with representatives of the four main political parties in a bid to see if he can find a way out of the deadlock. A statement issued by his office said he would "without delay take steps to allow him to personally ascertain the developments possible".

Quite what those developments could be remain uncertain. Bersani has not formally renounced his attempts to form a government, but most observers expect Napolitano to try to appoint a so-called "president's government" which would rely on the personal authority of the head of state, would be backed by both left and right and would be likely to run along similar technocratic lines as the one he appointed in late 2011.

This is made unusually problematic, however, by the fact that Napolitano, who turns 88 in June, is due to stand down in May.

Under such a scheme, several names have been touted as possible successors to Mario Monti, including Pietro Grasso, the newly elected former anti-mafia magistrate and speaker of the upper house of parliament or senate. He stressed the urgent need for a solid government to be formed. "This country needs at all costs a government to get going again," he said. "The people would not understand; it would almost seem that we were blaming them for not having managed to vote in a way that allowed us to govern."

Such a government would be likely to have a restricted, reformist remit and a short life. A fresh election later this year is a strong possibility.

Monti – whose government is technically still in charge of Italy as the crisis rolls on and will mark its 500th day in office this weekend – will not be sad to be replaced. During a stormy session in the lower house on Wednesday he remarked: "This government can't wait to be relieved of its duty."