League leader Matteo Salvin, center, and Forza Italia's Silvio Berlusconi | Tiziana Fabi/AFP via Getty Images Italy’s anti-establishment parties race to form coalition Former Italian premier removes the main obstacle for the potential coalition.

ROME — Italian President Sergio Mattarella has given the populist 5Star Movement and far-right League until Sunday to reach a coalition deal.

The move came after Silvio Berlusconi gave the go-ahead on Wednesday for his allies in the League to try to form a government with 5Stars, removing the main obstacle to the tie-up after two months of political impasse.

After a day of frantic talks among the rival parties, the former Italian prime minister said in a statement that he would not oppose an alliance between the League and the 5Stars, though he said his party would not support such a coalition in a vote of confidence in parliament, which a new government needs to win in order to take office.

The 5Stars had asked the League to ditch their center-right alliance with Berlusconi's Forza Italia as a condition of forming a coalition, arguing the media mogul represents the political establishment they were founded to fight against.

Berlusconi said he acknowledged the decision of “another political force of the center right to create a government with the 5Stars.” He added that his party “would calmly and without prejudice assess the work of the government” ensuring loyal support to measures in line with the center-right platform.

The former premier also stressed that this move did not mean the end of the center-right alliance.

The prospect of a coalition between the League and the 5Stars reemerged after Mattarella said on Monday he was ready to appoint a “neutral government” made up of technocrats to break the two month-long political deadlock following the inconclusive March 4 election.

Mattarella agreed on Wednesday to hold off on his plans for 24 hours after the two parties informed him they were holding last-minute talks to try to reach a coalition deal. He subsequently OKed a request for an extension until Sunday to hammer out the details of a government agreement. The parties are due to report back to the president on Sunday. The key issues yet to be resolved are who will be the prime minister and how to reconcile key differences in the parties' platforms.

The two parties should have enough support in parliament to win the vote of confidence, but may need the political backing of Berlusconi’s Forza Italia to pass key legislation. Berlusconi said his party was ready to consider giving its support on individual measures, evaluating them on a case-by-case basis as to whether they are in line with the center-right platform.

If the League and the 5Stars can reach a government agreement, it’s still unclear who would become prime minister of their populist government as both the League’s Matteo Salvini and 5Star leader Luigi Di Maio have strongly pursued that position. The pair, however, recently said they were ready to step aside to allow a government deal.