Italy's anti-establishment government sworn in three months after election

Italy's Giuseppe Conte, a law professor, has been sworn in as prime minister of an anti-establishment government intent on overhauling budgets and immigration.

Newly appointed Italian PM Giuseppe Conte opens the first council of Ministers at Chigi Palace in Rome on Friday. Source: AAP

Giuseppe Conte has been sworn in as Italy's prime minister, heading western Europe's first anti-establishment government bent on overhauling European Union rules on budgets and immigration.

Conte, a little-known 53-year-old law professor, is backed by the 5-Star Movement which grew out of a grassroots protest network, and the right-wing League, which has issued a budget-busting agenda of sweeping tax cuts and higher welfare spending.

The government was formed after three months of political deadlock following inconclusive March 4 elections, with the pre-election rivals striking a last-minute deal on Thursday to avert a fresh vote amid growing market turmoil.

Widespread voter disenchantment has seen anti-establishment parties upset mainstream politics across the continent, including Germany and France, but it is the first time they will run the government of a major western European country.

Conte made no comment to reporters after his swearing-in ceremony in the president's 16th century palace in Rome, in a room with a huge gilt mirror flanked by Italian and EU flags.

Italy's outgoing Premier Paolo Gentiloni, hands over the cabinet minister bell to new Premier Giuseppe Conte during the handover ceremony. Source: AAP

"I admit that I am choked up and happy," League leader Matteo Salvini said in a tweet which showed him for once formally dressed with his top shirt button done up for the occasion.

5-Star and the League have a solid majority in both houses of parliament, where the government will now face confidence votes early next week in order to be fully empowered.

Italy hosted the European Union's founding Treaty of Rome 60 years ago, but the once enthusiastically pro-EU Italians have progressively become disenchanted with Europe, blaming its fiscal rules for two decades of economic stagnation.

The disaffection has grown in recent years as hundreds of thousands of migrants have landed on Italy's shores from north Africa, fuelling support for the League which accuses the EU of abandoning Italy to deal with the influx on its own.