Premier Silvio Berlusconi has won a confidence vote in the Chamber of Deputies by a wide margin.
Mr Berlusconi had staked his coalition's survival on the outcome of this evening's vote in the lower chamber of Parliament.
He won 342 votes in favour of his government compared with 275 votes against. There were three abstentions.
Shaken by a nasty split with one of his two main coalition partners over the summer, Mr Berlusconi called the vote to confirm he could still command a comfortable majority in the legislature, which is halfway through its five-year term.
In his pitch to the Chamber before the vote, he argued that Italy must be spared political instability at a time of financial woes. Had he lost the vote today, which happened to be his 74th birthday, he would have been obliged to resign, paving the way for possible early elections.
Among those voting yes on the confidence motion were at least some of the politicians loyal to Gianfranco Fini, the right-wing leader who broke with Mr Berlusconi this summer after months of nasty bickering over how much power the premier should wield among his chief allies.
Following days of wooing by Berlusconi aides, some centrists outside the government's coalition also sided with the premier in the confidence vote roll call.
But the vote had barely been tallied when Mr Berlusconi's chief ally, Umberto Bossi, grumbled that it would have been better to go the early elections route.
Opinion surveys have showed that Mr Bossi's anti-immigrant Northern League riding a wave of popularity in its northern Italian base, while Mr Berlusconi's popularity has been slipping in the polls.
"It's better to take the high road in life, and the high road is elections," Mr Bossi told reporters after Mr Berlusconi's government won the confidence motion. "Berlusconi didn't want elections and now we're at this point."