Napolitano says reforms need to be completed next year
President bemoans resistance to improve governance23 October, 18:55
These include a new electoral law, cuts to the number of MPs and stripping the Senate of its equal status to the Lower House.
Progress so far has been slow.
"Today we have the opportunity to achieve valid results that respond to multiple needs in the 2013-14 period," Napolitano said in Florence.
"Italy's institutional reform is struggling to take shape after a series of omissions and delays and it is clashing with many obstacles and resistance.
"The issue of institutional and Constitutional reforms can no longer be avoided. We can't keep wasting our breath".
Napolitano picked up especially on the political parties' failure to agree on a new election law to replace the much-criticised current one that failed to produce a clear winner in February's general election. Ex-premier Silvio Berlusconi's centre-right People of Freedom (PdL) party has said it only wants to amend the current law while Letta's centre-left Democratic Party (PD) wants a completely new one to come into force.
"It's unacceptable that parliament is shipwrecked again on opposing positions and inconclusiveness," Napolitano said, calling reform of the election law "unavoidable".
Letta's government, which is based on a fragile, unsteady alliance between the PD and the PdL, is aiming to change the current parliamentary set-up in which all laws must be approved by both the House and Senate, seen by many as being one of the major sources of dysfunction for Italy's institutions.
The plan is to keep the Lower House as the main law-making chamber of parliament, while turning the Senate into an assembly of Italian regions.
But opposition from the anti-establishment 5-Star Movement, the third-biggest group in parliament, has slowed moves to change the Constitution to make this possible.
Napolitano also complained Wednesday that faith in Italy's political class was affected by a continuous wave of "outbursts, partisanship and slanderous inventions that pollute the political debate and destabilize the government". He added that a message he sent to parliament calling for action on chronic prison overcrowding was manipulated and exploited by critics who suggested it might herald an amnesty that would benefit Berlusconi after a tax-fraud conviction was upheld by the supreme court.