The centre-right coalition now dominating includes a smaller far-right party, with 33% to 36% percent of the vote, compared with the anti-establishment 5-Star Movement's 29.5% to 32.5%.
Italy faces a prolonged period of political instability after voters delivered a hung parliament in Sunday's election, spurning traditional parties and flocking to anti-establishment and far-right groups in record numbers.
With no party or coalition able to form a governing majority, we're in for the usual post-vote deal-making.
Financial markets opened lower and were volatile in early trading Monday.
"Ungovernable Italy", read the headline in La Stampa.
In third place was the centre-left coalition with 23 per cent meaning no faction won a clear majority.
According to the results released by Italy's interior ministry, a center-right coalition that included Berlusconi's Forza Italia party and the anti-immigrant League won about 37 percent of the vote. "We need to wait for our allies, but it is already possible to say that our right-wing coalition is a coalition that could rule this country", Salvini said.
Claudio Borghi, the League's economics chief, on Monday suggested that, with Berlusconi on course to lose the leadership of the center right for the first time since he entered politics in 1994, a center-right headed by League leader Matteo Salvini could find a modus vivendi with 5-Star.
Together, Lega Nord and the Five Star Movement could - theoretically - govern the country.
"I am and will remain a populist", he said.
Matteo Salvini, the head of Italy's anti-migrant, euroskeptic League party declared Monday that the shared European euro currency is "wrong" and is ultimately destined to end.
Di Maio said that "we are a political force that represents the entire nation". However, Italy has a long history of finding a way out of apparently intractable political stalemate.
MATTEO Renzi has resigned as head of Italy's Democratic Party following his humiliating defeat during the national elections.
Regarding Italy meanwhile, "the complexity of the Italian voting system makes it very hard to establish what happens next and when, but neither of the anti-establishment. parties are an attractive option for markets or the euro", said Rebecca O'Keeffe, head of investment at Interactive Investor.
The poll also showed the PD party had around 21.3 percent of the vote. He will choose someone to try to form a government as he cajoles former rivals to get over the rancour of the campaign.
Another far-right politician, France's Marine Le Pen, tweeted that the projected results signaled an anti-EU sentiment in the southern European country.
It will now be up to President Sergio Mattarella, a constitutional scholar, to sound out the political parties to determine who has the best chances of forming a government.
The results are likely to lead to weeks of negotiations between parties.
Founded by comedian Beppe Grillo, 5-Star has sought to allay fears in European Union capitals over its policies, dropping some of its more radical proposals, like leaving North Atlantic Treaty Organisation, and promising to be business-friendly if they win power.
"Keeping these promises would send the budget deficit over the 3 per cent limit", said Nobile, referring to the European Union budget rules that govern the single currency.
At this time past year, the rise of populism was considered by many economists as the gravest cloud hanging over Europe's economic future, especially as worries over Greece had abated. However, the continued political uncertainty could damage Italy's fragile economic recovery, and this is being played out in a large scale sell of in the FTSE MIB futures, now down some 1.2%.