The Italian Senate expelled former prime minister Silvio Berlusconi over his tax fraud conviction on Wednesday, humiliating the veteran centre-right leader who vowed to continue leading his party from outside parliament.

The Senate vote, after months of wrangling and delay, opens an uncertain phase for Italy, with the 77-year-old media billionaire now apparently in the twilight of his political career but prepared to use all his resources to disrupt Prime Minister Enrico Letta's coalition government.

"We are here on a bitter day, a day of mourning for democracy," Berlusconi told supporters from his Forza Italia party in front of his central Rome residence as the Senate voted a short distance away.

Berlusconi, who has dominated Italian politics for two decades, had already pulled his party out of Letta's coalition after seven months in government, accusing left wing opponents of staging a "coup d'etat" to eliminate him.

Stripped of his parliamentary immunity from arrest after 20 years as a lawmaker, he is now more vulnerable in a series of other criminal cases, where he is accused of offences including political bribery and paying for sex with a minor.

However, he no longer commands enough support in parliament to bring down the government, which easily won a confidence vote on the 2014 budget on Tuesday with the support of around 30 dissidents who split from Forza Italia this month.

Letta declared on Wednesday that his government was "stronger and more cohesive" after winning the budget vote and said it would press on with its reform programme.

The Senate declared Berlusconi ineligible for parliament after he was convicted of masterminding a complex system of illegally inflated invoices to cut the tax bill for his Mediaset television empire.

"The Senate did nothing more than to apply the law. It was the right thing to do, otherwise we would have had the law of the jungle," said Guglielmo Epifani, general secretary of Letta's centre-left Democratic Party (PD), which joined former comedian Beppe Grillo's anti-establishment 5-Star Movement in pushing for expulsion.

Under a law passed last year, politicians convicted of serious criminal offences are ineligible for parliament, but his removal had to be confirmed by a full vote in the Senate.

The court sentenced him to four years in jail, commuted to a year likely to be spent performing community service. He was also banned from holding public office for two years, preventing any immediate return to government.

Victim
A characteristic piece of political theatre, Berlusconi's address to supporters as the Senate voted underlined that he will remain a troublesome opponent of the government even outside parliament.

"We have to stay in the field and we can't give up, even if the leader of the centre-right is not a Senator any more. There are leaders of the other parties who are not in parliament either," he said.

Much like Grillo - who does not sit in parliament but keeps up a steady stream of attacks in public meetings and on his blog - Berlusconi will still be able to inflict damage on the government from the sidelines.

Berlusconi, who owns Italy's biggest private broadcaster, has adopted an increasingly euro-sceptical tone, attacking Brussels, German Chancellor Angela Merkel and Letta's euro-friendly government. Such attacks are likely to increase in the run-up to the European parliamentary elections in May.

The battle over Berlusconi has already disrupted any serious overhaul of the stagnant Italian economy, which is stuck in a recession that has lasted more than two years, sending youth unemployment over 40 percent.

The centre-right split may have removed the immediate threat to Letta, who has won two confidence votes in parliament since Berlusconi's conviction. But the risk of further judicial conflict over any of the other criminal trials and investigations hanging over Berlusconi could inflame his supporters still further.

Wednesday's rally, which attracted several hundred supporters, was smaller than many previous protests but Berlusconi retains a solid core of backing.

"Not only is he being judged but it's a form of humiliation," said Gianluca d'Avanzo, a 40-year-old office worker from the southern region of Puglia who came to Rome for the demonstration. "They are doing this to a man who has done so much for Italy. We are a country of ungrateful people."

Berlusconi joined Letta's Democratic Party in an unlikely coalition after an election in February but relations were rocky from the start, worsened by rows about tax policy and tensions over Berlusconi's tax fraud conviction in August.