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Silvio Berlusconi hit out Saturday at former loyalists in his centre-right party who have set up a "renewal" faction led by the media tycoon's ex-protege Angelino Alfano.
The billionaire blamed the split on "differences not of policy or values but between personalities who have created a poisonous atmosphere".
Alfano announced after late-night talks Friday that he would not remain at the side of his onetime mentor and would form a separate parliamentary grouping instead.
Berlsuconi responded with fury at a meeting of his People of Freedom (PDL) party in Rome, saying the move was against the spirit of his "coalition of moderates" within the party.
Alfano's faction, called the New Centre Right, could lure away about a third of PDL's deputies in the parliament and the Senate, media reports claimed Saturday.
"I am here to make a choice that I never thought I would make -- not to join Forza Italia," Alfano said late Friday, referring to Berlusconi's plan to relaunch the PDL under the name it carried when the mogul was first elected to parliament in 1994.
The 43-year-old Alfano said he made the decision because "these past few weeks have shown to what extent extreme forces have prevailed within our movement", referring to a belief by his supporters that Berlusconi was pandering to hardliners.
Berlusconi's party has been in turmoil since September when the former premier tried to bring down the government by withdrawing his ministers from the cabinet, and was forced into a humiliating climbdown when they refused to heed his orders.
He added he had not slept all night and expressed his "sadness" at the break-up, drawing frequent applause from his supporters.
In a conciliatory gesture Berlusconi added however that Alfano's grouping would be a "necessary member" of his centre-right voting bloc, with Forza Italia at its head.
The 77-year-old tycoon on will face another humiliation on November 27 -- the prospect of being stripped of his parliament seat when the Senate votes whether to eject him under a law banning convicted criminals from the chamber.
The move comes after the Italy's supreme court on August 1 turned down his final appeal in a tax fraud case, handing Berlusconi his first-ever definitive conviction in a long history of legal woes. Berlusconi has asked to serve his 12-month sentence by carrying out community service.
Ejection from the Senate would mean Berlusconi being out of parliament for the first time since 1994, when the media and construction magnate first burst onto Italy's political scene.