Italy’s populist parties reacted with fury on Sunday night when attempts to form a government dramatically broke down after the country’s president vetoed their choice of economy minister, a harsh critic of the euro.

Nearly three months after a general election on March 4, hopes that the country would have a government formed by the anti-establishment Five Star Movement and the hard-Right, euro-sceptic League were dashed.

The two parties, which were about to form Western Europe’s first populist government, wanted Paolo Savona, an economist and banker who has been highly critical of the euro, as their economy minister.

The parties won 50 per cent of the vote at the election and insisted that their choice of cabinet ministers was an essential part of their democratic mandate.

But Sergio Mattarella, Italy’s president, saw otherwise, blocking Mr Savona for the economy portfolio.