0146 GMT February 20, 2020
Conte accused Matteo Salvini, leader of the right-wing League party, of trying to ruin the ruling coalition for personal and political gain, risking financial instability for Italy, Sky News reported.
Conte told a packed senate: "[Salvini] has shown that he is following his own interests and those of his party.
"His decisions pose serious risks for this country."
He described Salvini's actions as "serious institutional recklessness, above all showing disrespect to Parliament and liable to tip the country into a spiral of political uncertainty and financial instability".
Earlier this month, Salvini pulled the plug on his party's coalition with the anti-establishment Five Star Movement, accusing them of being obstructionist.
Salvini wants to exploit the League's growing popularity by forcing an election more than three years ahead of schedule.
Sitting next to Conte, who does not belong to either of the coalition's two parties, Salvini shook his head and rolled his eyes as his actions were criticized.
Responding to Conte's accusations, he said his goal was to challenge the European Union's fiscal rules, which he has blamed for making Italy poorer.
He called on Rome to spend at least €50bn (£45bn) to stimulate the economy.
Salvini also said he was not afraid of an early election, adding that he would "do again everything I did... I'm a free man and I don't fear Italians' judgement".
Italy's Parliament had been recalled from its summer recess to decide on the future of the government, barely a year into its term.
Earlier in the day, Luigi Di Maio, head of the Five Star Movement, had hinted at what might be coming, with a Facebook post thanking Prime Minister Conte.
He wrote: "Whatever happens, I wanted to tell you that it was an honor to work together in this government."
The next step is for Conte to inform Italy's President Sergio Mattarella of his decision, something he said he would do later the day.
Mattarella could then ask Conte to stay on and try to find an alternative majority in Parliament.
Or he could accept the resignation and allow another leader the chance to put together a coalition.
If these fail, Mattarella could dissolve Parliament and hold a new election as early as October.