Romania's cabinet met on Saturday to prepare for a referendum that will decide whether President Traian Basescu is impeached, after parliament cleared the way for the crucial vote.
A total of 256 out of 432 lawmakers voted on Friday in favour of impeaching the centre-right President, paving the way for a national referendum to be held July 29.
The vote followed a series of controversial moves including the sacking of the ombudsman and both speakers of parliament that have sparked warnings that the EU state's democracy is under threat.
With Basescu officially suspended from duty, Crin Antonescu, 52, of the ruling Liberal Social Union (USL), has been appointed acting president.
A bitter feud between Basescu and his arch-rival, centre-left Prime Minister Victor Ponta, 39, has thrown Romania into its worst crisis since it emerged from communist dictatorship just over two decades ago.
Ponta barely concealed his delight over Friday's vote, telling his cabinet the government would now be able to act freely.
"Now all of the obstacles that have got in the way since our government came to power are gone," he said.
"We are going to have to prove that we can function well now that we don't have to worry about any objections to the decisions we take."
Basescu, a former sea captain, is facing impeachment over claims he improperly assumed the powers of the prime minister when he announced drastic austerity cuts in 2010.
Romania, badly hit by recession, had agreed to tough belt-tightening including public-sector wage and benefit cuts in return for a multi-billion-dollar bailout from the European Union and IMF.
Basescu, whose popularity has plummeted since the deal, "is facing the toughest moment of his career," said Florin Negrutiu, a columnist at online newspaper Gandul.
"Never has he faced such hatred from the people."
If voters decide to impeach Basescu -- who is in his second term of office, due to end in 2014 -- it will trigger a presidential election.
But the defiant president, who survived a previous impeachment attempt in 2007, wrote on his Twitter account Friday: "Armed with the truth and the constitution, let's have a referendum."
Ponta's centre-left coalition, in office only since May, sparked widespread concern with a decree Wednesday barring the Constitutional Court from ruling on parliamentary decisions -- removing what could have been an obstacle to Basescu's impeachment.
In addition to firing the parliamentary speakers and ombudsman, the government also threatened to sack Constitutional Court judges.
The drastic actions sparked concern in the West, led by the United States and the European Union, that Ponta's government is eroding democracy in its campaign to oust the 60-year-old Basescu, who first took office in 2004.
"We are concerned about recent developments occurring in Romania, our Nato ally and partner, which threaten democratic checks and balances and weaken independent institutions such as the courts," said State Department spokeswoman Victoria Nuland.
"The United States stands with our EU partners and urges that Romania uphold and protect the common values and principles that unite the European and trans-Atlantic community of nations," she added.
For its part the European Commission warned: "The rule of law, the democratic checks and balances and the independence of the judiciary are cornerstones of the European democracy and indispensable for mutual trust within the European Union."
France, Germany, the Council of Europe and several rights groups, including Freedom House and the Helsinki Committee, also expressed concern at the events in Romania.