matteo renzi
Italian Prime Minister Matteo Renzi speaks during a media conference after a referendum on constitutional reform at Chigi palace in Rome, Italy, December 5, 2016.Reuters

Italian Prime Minister Matteo Renzi stuck to his guns and resigned from his post after a crushing defeat in the referendum about constitutional changes that would have centred more power in the federal government.

Activists and common people opposed the change as it would take powers away from the Senate and the regional governments. They argued that this move would affect democracy.

Late on Sunday, Renzi conceded defeat and accepted responsibility for the outcome, stating that the "No" campaign, led by the Five Star Movement, must propose strategies that would take the economy out of a slump.

The No vote led with 60 percent against 40 percent for Yes. There was a turnout of nearly 70 percent people for the referendum, which turned into a vote of confidence/discontentment with the Prime Minister.

"Good luck to us all," Renzi told reporters. He is expected to tell the Cabinet about his resignation on Monday following which he would tender his resignation to Italian President Sergio Mattarella.

With the self-styled reformist's exit, Italy will be fending off a banking crisis, political turmoil and a populist anti-establishment movement, BBC reported.

One of the Five Star Movement's leaders Luigi Di Maio said, "Starting tomorrow we'll be at work on a Five Star government." The head of the party, Beppe Grillo, said that they would demand for an election "within a week."

However, it is possible that Renzi's Democratic Party would make an interim government until the next election in 2018.