Throughout the day, political leaders scrambled to line up allies and form alliances as Salvini, who as interior minister has made stopping migrants from reaching Italy by sea his priority, pressed for an early election to try to capitalize on his soaring popularity and snag the premiership for himself.
Instead of scheduling a vote on the no-confidence motion the League lodged against the government last week, members of the Italian Senate, hastily summoned back from vacation to grapple with the political crisis, voted to have Conte address Parliament's upper chamber on Aug.20
It was unclear if a vote on the motion would follow. Before Tuesday, Salvini's allies worked to get senators to consider the no-confidence question this week. Salvini, in a surprise move, instead announced that his party was willing to first complete passage of a law thought would drastically reduce the number of lawmakers in future legislatures.
The law was eagerly sought by the anti-establishment 5-Star Movement, the government's senior partner, which made cutting back on highly paid lawmakers and their entourages - derided by some in Italy as "the caste" a key promise to its base.
Salvini, pointing to 5-Stars in the Senate, pledged that after the cost-cutting measure receives final approval in the lower Chamber of Deputies, "we vote the day after" in a general election. The chamber is set to take up the law on Aug. 22.
Conte must offer his resignation to President Sergio Mattarella if a no-confidence motion passes. However, an early election can only happen if Mattarella dissolves Parliament, and it was unclear if and when he would do that.
If Parliament is sent packing, elections must be held within 45 to 70 days, making Salvini's boast of "day after" balloting unrealistic. But the political turmoil sparked by the League's challenge already has rattled financial markets.
"Italy wants to have certainty, and what's more beautiful, democratic, transparent, linear, dignified than to give the word to the people" at the ballot box, Salvini said during a speech in the Senate.
The 5-Star Movement chose Conte to be premier after a 2018 election and is weighing whether to ally now with the opposition Democratic Party. The strategy aims to delay an early election, at least until after painful budget cuts are made to avoid triggering sales tax hikes.
Former Premier Matteo Renzi, a Democratic leader, argued that such a deal would allow the government to make the budget cuts before year's end to avoid the automatic rise that would bring the VAT sales tax to 25% next year.
If that happens, Italy would "risk a recession worse than that of 2011," Renzi said, citing worrisome economic prospects in China and Germany as additional factors that could cause a rapid downturn in the global economy.
An alliance with the 5-Stars risks deepening already bitter divisions within Renzi's party, which is now Parliament's largest opposition force. Just a year ago, the anti-establishment 5-Stars rebuffed the center-left Democrats in favor of the anti-migrant League, forging a coalition to bring Europe's first all-populist government into power.
The possibility of a deal between Renzi and the 5-Star Movement poses challenges for the Democratic Party. The prospect has put the Democrats "on the verge of an existential crisis and rekindled rumors about a new party split," Wolfango Piccoli, co-president of Teneo, an analyst firm based in London.
Renzi said he's willing to take that risk. "My worry for the country is far greater than my worry for the PD (Democratic Party)," the ex-premier said. "If the country goes into recession, it's grave for everyone."
Giada Zampano in Rome contributed.