The vote, after months of political wrangling, opens an uncertain new phase in Italian politics, with the 77-year-old media billionaire preparing to use all his extensive resources to attack Prime Minister Enrico Letta's coalition government.

Rome: The Italian Senate expelled Silvio Berlusconi over his tax fraud conviction on Wednesday, drawing a defiant response from the veteran centre-right leader who vowed to continue leading his party and fight on outside parliament.

The vote, after months of political wrangling, opens an uncertain new phase in Italian politics, with the 77-year-old media billionaire preparing to use all his extensive resources to attack Prime Minister Enrico Letta's coalition government.

"We are here on a bitter day, a day of mourning for democracy," Berlusconi told several thousand supporters from his Forza Italia party in front of his residence in central Rome as the Senate voted only a few hundred yards away.

Berlusconi, who has dominated politics in Italy for two decades, has already pulled his party out of Letta's coalition after seven months in government, accusing leftwing opponents of mounting a "coup d'etat" to eliminate him.

Stripped of his parliamentary immunity from arrest, he is more vulnerable in a series of other cases, where he is accused of offences including political bribery and paying for sex with a minor.

However he no longer commands enough support in parliament to bring down the government, which easily won a confidence vote on the 2014 budget late on Tuesday with the support of around 30 dissidents who split off from Forza Italia this month.

Letta declared on Wednesday that his government was now "stronger and more cohesive" after winning the budget vote and said it would press on with its reform programme.

The Senate declared Berlusconi ineligible for parliament after he was convicted of masterminding a complex system of illegally inflated invoices to cut the tax bill for his Mediaset television empire.

Under a law passed with Berlusconi's support last year, politicians convicted of serious criminal offences are ineligible for parliament, but his expulsion had to be confirmed by a full vote in the Senate.

The court sentenced him to four years in jail, commuted to a year likely to be spent performing community service. He was also banned from holding public office for two years, preventing any immediate return to government.

Both Letta's centre-left Democratic Party (PD) and former comedian Beppe Grillo's anti-establishment 5-Star Movement rejected a series of motions challenging the move.

VICTIM

In a characteristic piece of political theatre, Berlusconi addressed a rally of supporters outside his Rome residence as the vote was taking place, underlining that he will remain a troublesome opponent to the government even outside parliament.

"I'm not going to be retiring to some convent," he told supporters. "We're staying here!"

Much like Grillo, who does not sit in parliament but who keeps up a steady stream of attacks in public meetings and on his widely read blog, Berlusconi is almost certain to mount a sustained campaign against the government in the run-up to the European parliamentary elections in May.

The political battle over Berlusconi has already hampered any serious overhaul of Italy's stagnant economy, which is stuck in a recession that has lasted more than two years, sending youth unemployment over 40 percent.

The split on the centre-right may have removed the immediate threat to Letta, who has won two confidence votes in parliament since Berlusconi's conviction, but the risk of further judicial conflict over any of the other criminal trials and investigations hanging over Berlusconi could inflame his supporters still further.

Berlusconi joined Letta's Democratic Party in an unlikely coalition after the February election left no side able to form a government on its own.

But relations were rocky from the start and were worsened by rows over tax policy and tensions over Berlusconi's tax fraud conviction in August.

Reuters