Italy's president rejected the resignation of Prime Minister Mario Draghi on Thursday after a day of political drama that threatened to bring down a national unity government that has been in office less than 18 months.

Draghi, the former European Central Bank (ECB) president, announced he was to resign on Thursday after the 5-Star Movement, a coalition party, failed to back him in a confidence vote over his plan to combat soaring prices.

"The national unity coalition that backed this government no longer exists," said Draghi, who has been prime minister of a broad coalition since February 2021.

Draghi, 74, went to the Quirinale Palace in Rome to meet President Sergio Mattarella and hand in his resignation but Mattarella, the supreme arbiter in Italian politics, urged him to rethink.

Mattarella asked Draghi, who is an unelected technocrat, to address parliament to get a clearer picture of the political situation.