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It was the embattled premier's second blow in less than a month after his People of Freedom party lost critical mayoral votes in Milan and Naples and even Berlusconi supporters were saying something needed to change quickly.
"The high turnout in the referendums shows a will on the part of citizens to participate in decisions about our future that cannot be ignored," Berlusconi said, after official data showed 57 percent of voters had taken part.
Turnout was of crucial importance since the referendums required participation of more than 50 percent in order to have legal force.
"The will of Italians is clear on all the subjects of this consultation. The government and parliament must now respond fully," Berlusconi said.
Final results are due later on Monday but early data showed crushing votes of more than 90 percent against the government in the four referendum questions -- one on nuclear, one on the immunity law and two on water privatisation.
The vote against government plans to resume a nuclear programme reflects popular unease about atomic energy in Europe after the Fukushima disaster in Japan and is likely to set back any prospects of nuclear power in Italy for decades.
"Italians have finally woken up and decided to take their destiny into their hands," said a jubilant Margherita Sina, 25, one of hundreds partying in the streets of Rome as people around her waved trade union and Greenpeace flags.
"This is huge! Italians have become more responsible," she said.
Sixteen-year-old Laura said: "It's the beginning of the end for Berlusconi, this really is the end of Berlusconi-ism."
Berlusconi did not vote and the government had encouraged its supporters to stay away but it switched to damage control mode as the scale of the defeat became clear, warning critics against making too much of the referendums.
Daniele Capezzone, a spokesman for the ruling party, said critics should not see "a meaning or a political effect" in the votes, while Defence Minister Ignazio La Russa said there would be "no effect on government policy".
But tensions clearly emerged with the Northern League party, the junior partner in the coalition that is critical to keeping Berlusconi in office.
"We got a slap in the face in the elections two weeks ago. Now at the referendums we've had another slap. I don't want getting slapped in the face to become a habit," said Roberto Calderoli, a Northern League minister.
Giuliano Ferrara, an influential talk show host and long-term Berlusconi supporter, said: "Something needs to change."
"Berlusconi and his ruling elite have decided not to change, to continue like this and I deeply and radically disagree."
Business daily Il Sole 24 Ore said this was the "most arduous" challenge for Berlusconi since his election victory in 2008.
Meanwhile Pier Luigi Bersani, leader of the main opposition Democratic Party, said Berlusconi should resign. "This referendum was about the divorce between the government and the country," he said.
Anticipating the result of the vote earlier on Monday, Berlusconi said during a joint press conference with Israeli counterpart Benjamin Netanyahu: "We will have to commit strongly to the renewable energy sector."
"Following a decision being taken by the Italian people, Italy will probably have to say goodbye to the issue of nuclear power stations," he said.
Italy abandoned atomic energy with a referendum in 1987 after the Chernobyl disaster, but Berlusconi has made its reintroduction a major policy goal.
His government had argued that it would have slashed electricity bills, reduced Italy's energy dependency and been better for the environment.
Daniel Cohn-Bendit, leader of the Greens in the European Parliament, has said that a vote against nuclear power in Italy "could open a serious phase of reflection in other member states" of the European Union.
The vote against Berlusconi's partial immunity law was also being seen as a signal of disenchantment over the 74-year-old prime minister's legal woes.
Berlusconi is a defendant in ongoing three trials involving allegations of bribery, fraud, abuse of power and paying for sex with a 17-year-old girl.
The prime minister's popularity ratings have hit record lows this year after he came under investigation over his liaison with nightclub dancer "Ruby the Heart Stealer" and amid continued sluggish growth in the Italian economy.