The euro's survival is under increased threat following the political instability caused by the Italian referendum result, German business bosses warned yesterday, raising further questions about the long-term viability of Italy’s membership of the currency union.

Ulrich Grillo, the head of the Federation of German Industries, or BDI, said the crushing defeat handed to the Italy’s centrist prime minister, Matteo Renzi, had worsened the outlook for the survival of the single currency.

"The risks of a new political instability for economic development, the financial markets and the currency union are increasing further,” he said.

Stock and bond markets shrugged off the immediate risk from the Italian vote, but a leading independent analyst warned that Italy’s membership of the euro on “borrowed time” following Mr Renzi’s defeat at the hands of anti-establishment political forces.

The Centre for Economics and Business Research (CEBR), a leading economics consultancy, said that following the vote it now estimated the chances of Italy staying in the Euro for the next five years had fallen below 30 per cent.

The CEBR said that bitter three-month campaign had demonstrated that Italian voters would not tolerate indefinitely the chronic unemployment, stagnant wages and Brussels-imposed austerity that now came with euro membership.

“There is no doubt that Italy could stay in the euro if it were prepared to pay the price of virtually zero growth and depressed consumer spending for another 5 years or so,” the group said in a note.