Italian Prime Minister Mario Monti says he plans to resign after Silvio Berlusconi's PDL party withdrew its support for the government, BBC News reported.

Monti, who heads a non-elected cabinet of technocrats, said he will try to pass a budget and financial stability law before standing down.

Hours earlier, former Prime Minister Berlusconi said he will run for office again next year.

He said Monti's austerity policies had harmed Italy.

Berlusconi's People of Freedom party withdrew its support from the government on Thursday, December 6.

A statement from the office of President Giorgio Napolitano said that Monti "does not think it possible to continue his mandate and consequently made clear his intention to present his resignation".

If the law for next year's budget can be passed "quickly", Monti would immediately confirm his resignation, the statement said.