A vote on Berlusconi's ejection from the Senate scheduled for Wednesday would see the former prime minister forced to leave parliament for the first time since he entered politics in the early 1990s.
Stalling tactics by Berlusconi loyalists have failed to delay the looming vote, which experts say could also leave Berlusconi far more vulnerable to arrest without the shield of parliamentary immunity.
The expulsion procedure follows a tax fraud conviction linked to Berlusconi's business interests and stems from a new law aimed at cleaning up politics amid plunging rates of public support.
Political analysts have warned the former leader's public downfall could rock the coalition.
"The government cannot claim to be safe from the impact" of such a "dramatic vote, a historic moment", the influential Corriere della Sera daily said.
Fears that this week's vote would bring down the government have however been allayed by a split in Berlusconi's ranks led by one of his former proteges, Deputy Prime Minister Angelino Alfano.
Alfano has said he and his supporters will vote against Berlusconi's expulsion from parliament but will stay in the left-right coalition even if the vote goes against the scandal-hit media magnate.
While some experts see this as a good omen for much-needed reforms under a moderate, centrist government, others worry about greater instability with Berlusconi sniping from the opposition.
Italy is struggling to extricate itself from its longest post-war recession, with unemployment and public debt set to rise next year even as the economy is forecast to resume meagre growth.
Wednesday's vote comes just as parliament debates next year's draft budget, which Berlusconi has already condemned as too tax-heavy and will likely vote against in a session on Monday formalizing his break with centre-left Prime Minister Enrico Letta.
Without Berlusconi's Go Italy (Forza Italia) party, the government's Senate majority could fall to just 10 seats, even though it will continue to enjoy wide support in the lower house Chamber of Deputies.
A poll earlier this month by the Ipsos institute following the rift between Berlusconi and Alfano's New Centre-Right party, found that a coalition led by Berlusconi would still come first in an election.
Known abroad mainly for his buffoonish antics, tasteless jokes and lascivious private life, billionaire Berlusconi remains a formidable campaigner with huge resources at his disposal.
Community service 'humiliation'
The 77-year-old was in fighting form at a meeting of hundreds of young Go Italy supporters on Saturday, accusing his leftist rivals of engineering a "coup d'etat" against him through the courts.
He said President Giorgio Napolitano should pardon him for the tax fraud, arguing that the idea of doing a year of community service as part of his punishment was "a humiliation for me, and also for the country".
Thousands of Berlusconi supporters are expected at a rally outside his luxury home in central Rome on the day of the vote on Wednesday and Berlusconi is set to address his fellow senators just before it.
Berlusconi is currently appealing convictions for having sex for money with an underage 17-year-old prostitute, abusing the powers of the prime minister's office and publishing a police wiretap in one of his newspapers to damage a political rival.
He is also facing a new trial for bribing a senator to join his party's ranks and could come under investigation for alleged pay-offs made to the young women who took part in raunchy "bunga bunga" parties at his villa in exchange for favourable testimony.
He has denied all of it and says he has been targeted by judges ever since entering politics, portraying himself as a victim of Italy's bureaucracy in a way that has bolstered his support.
The prospect of Berlusconi being led away in handcuffs is a remote one but he does face higher legal risks without his parliamentary seat, which grants a series of safeguards from prosecution.
Rome is rife with rumours of possible detention under one of the multiple legal proceedings against him and the Il Messaggero daily even speculated that Russian President Vladimir Putin – who is visiting Rome this week – could give his old friend diplomatic papers to allow him to flee to Moscow.