Catalan politicians celebrated the support from the parliament
Spain's parliament has approved proposals to grant greater autonomy to the north-eastern region of Catalonia.
Under the proposals, the affluent region would be called a nation and given the right to control taxation and change laws passed by parliament.
The plan passed its first reading by 197 votes to 146, but has to be amended to comply with Spain's constitution.
It has divided the ruling Socialist Party and infuriated conservatives, who say it will cause Spain to break up.
The BBC's Danny Wood in Madrid says many Spaniards see the Catalan plan as the strongest test their democratic political system has had to face.
A Basque independence plan was overwhelmingly rejected by the national parliament as anti-constitutional, earlier this year.
Prime Minister Jose Luis Rodriguez Zapatero said the vote on the latest proposals meant "Yes" to the Catalan reforms and "Yes" to ensuring they comply with the Spanish constitution.
He wants amendments to the financial and judicial parts of the plan and says the word "nation" must be changed to "national entity".
But the prime minister's ability to make changes is limited by his minority government's dependence on the support of two Catalonian parties.
The leader of the opposition, Mariano Rajoy, questioned how the proposal could be approved when such important elements have to be modified.
Catalan politician Josep Lluis Carod Rovira accused the conservative Popular Party of Catalonia-phobia. Other Catalan MPs insist the autonomy proposal is about bringing their region into the 21st century and improving conditions for their language, their people and their economy.
The slogan of the regional government in Barcelona, which has already backed the proposals, is "times change, so change the statute".
Our correspondent says the Catalans want more tax revenue, to reflect an increased population, and more say over what happens to that money - for example, where it is spent in education.
The Catalan proposals have provoked heated debate in Spain
It also demands more control over ports, airports and immigration.
One Catalan MP told the BBC the statute represents the "first step to a full reform of the state".
She said her party the republican left (ERC) hopes it is the first step towards independence.
Critics say that increasing the limited autonomy that the region was given in 1978, after the death of General Francisco Franco, will encourage other regions to press for more powers - especially in the Basque Country.
A final vote on the changes may take several months.