After the withdrawal of support by MQM and Jamiat Ulema-e-Islam, the Pakistan People's Party-led federal government was reduced to a minority controlling around 160 seats in the 342-member national assembly, triggering horse trading for new allies.
Though the Pakistan PM is not bound to seek a vote of confidence in Parliament, Gilani could face problems in getting crucial legislation through and may have problems even getting the budget endorsed which could force snap elections.
With no headway reported yet in moves by PPP leaders including Pakistan President Asif Ali Zardari to woo back MQM, Gilani telephoned PML-Q chief Chaudhry Shujaat Hussain early on Monday morning, reportedly to seek his support.
The move assumed significance as the PPP chief and Zardari had once described the PML-Q as the "qatil (killer) league", holding the party responsible for the 2008 murder of his wife Benazir Bhutto as it had allegedly failed to provide adequate security to her.
There were several significant political developments in Lahore, where Gilani is camping, in the wake of the setback suffered by the PPP.
PML-Nawaz chief Nawaz Sharif held a meeting with senior leaders of the party, including Punjab Chief Minister Shahbaz Sharif, and decided that his party would not join any efforts to "blackmail" the government, sources said.
The JUI, which too pulled out of the PPP-led government last month, sent a delegation of senior leaders led by Abdul Ghafoor Haideri to meet Hussain to ask him not to support the ruling coalition. Sources said the JUI told the PML-Q chief that the government should be allowed to fall as it no longer enjoyed the support of the people.
Talking to reporters after the meeting with Hussain, Haideri reiterated the JUI's demand that Gilani should resign as PM. Haideri also said the cabinet should resign as the government had lost majority in Parliament.
The PPP-led government is currently facing its worst crisis since it came to power after the 2008 general election.
The MQM, which draws its power from the Urdu-speaking people of Karachi, played a key role in propping up the government with its 25 parliamentarians. The MQM said it had made the decision because the government had failed to tackle the people's problems, including price rise and corruption, though observers contended the move could be part of a greater effort to weaken the PPP's grip on power.
Soon after the MQM withdrew its support on Sunday night, Gilani put on a brave face and said his government would survive even if all the allies of the PPP deserted it.
Gilani also expressed the hope that Nawaz Sharif, who he said had always shown sagacity, would not let democracy be derailed. Gilani is expected to meet Punjab CM Shahbaz Sharif to discuss the political situation and seek the party's support in Parliament.
The PPP has 126 members in the National Assembly or lower house of Parliament, and enjoys the support of about 160 lawmakers. It is at least 12 seats short of a simple majority and PPP leaders are making a desperate scramble to shore up support for the government's survival.
The woes of the government dominated the front pages of Pakistani newspapers, with the headline in The Nation stating, "Gilani government terminally ill." The headline in the influential Dawn read, "MQM bombshell rocks coalition."
"The faltering PPP-led coalition government received what may prove to be a fatal push when its major coalition partner MQM decided to sit on the opposition benches in Parliament, leaving Prime Minister Yousuf Raza Gilani as Leader of the House without a majority," said the report in the Dawn.
The Express Tribune described the MQM's action as the "final act of its long impending divorce from the coalition government".Analysts appearing on the numerous talk shows on Pakistani news channels debated whether the country was headed for mid-term polls or another military intervention though there appeared to be no unanimity of views among them.