Italian President Carlo Azeglio Ciampi has defied Prime Minister Silvio Berlusconi's government by vetoing a justice reform bill.
Mr Ciampi says the reform bill would weaken the powers of the judiciary
Mr Ciampi refused to ratify the bill on Thursday, saying some of the reforms were "clearly unconstitutional".
Judicial reform has enflamed passions since Mr Berlusconi returned to power in 2001, with opponents describing his proposals as an "act of vengeance".
Mr Berlusconi says the changes aim to make the legal system more efficient.
The prime minister has accused the judiciary of being left-wing and of plotting to force him out of office.
He blames magistrates for bringing down his last government in 1994 with false accusations of corruption.
Correspondents say he has made little attempt to hide his antagonism towards Italy's judges and once described them as "mentally disturbed".
Opponents accuse Mr Berlusconi of letting his personal legal battles tied to his business empire dictate his political agenda.
"We must stop this law while we still have time," said
centre-left politician Antonio di Pietro, a former anti-fraud magistrate.
"This law was only an act of vengeance
against the independent judiciary."
Mr Berlusconi said the problems would be swiftly overcome and predicted the law would be ratified by February.
"This is a good reform even if it is a little lightweight,"
he said on a visit to Brussels.
"It is not the reform we would have liked for Italy's justice problems, which continue to this day, but it is a step forward."
Mr Ciampi said the bill delegated too many powers away from the justice system, and he raised questions on how it would be financed.
Under the proposals, the country's 9,000 magistrates would have been required to choose between a career either as a prosecutor or a judge.
The reforms also proposed competitions for magistrates seeking promotion and would have given the government the possibility to change how they are appointed.