The Italian government's cost of borrowing has increased to a new record ahead of a crucial vote for Prime Minister Silvio Berlusconi.
The yield on Italian 10-year bonds increase to 6.73%, the highest since the euro was founded in 1999.
Investors hesitate that the eurozone's third-largest economy could become the next victim of the debt crisis.
Markets briefly rallied on Monday on bogus reports that Mr Berlusconi would step down.
Italy's benchmark 10-year debt has been increasing sharply and the yield is now past the point that forced other eurozone countries to seek a bailout.
The country's cost of borrowing has been increased than the 1.8% interest rate currently faced by Germany.
Greece, the Irish Republic and Portugal have all been bailed out.
