Berlusconi ally threatens split

Silvio Berlusconi (left) has been losing popular support

Italian Prime Minister Silvio Berlusconi's government could be facing collapse, after a key ally threatened to leave the ruling coalition.

National Alliance (AN) leader Gianfranco Fini said his party would make a decision after Mr Berlusconi addressed parliament on Wednesday.

The prime minister faces a vote of confidence on Thursday.

If he loses the government must resign and a general election may be called a year ahead of schedule.

Mr Berlusconi took allies and foes by surprise. He had been expected to resign on Monday, enabling him to make a major government reshuffle and announce major policy changes.

But instead he told the president he would put his authority to the test in a parliamentary vote.

'Negative impression'

The AN is the second largest party in the coalition, and its departure would bring down the government.

It believes current policies are skewed in favour of the country's more prosperous north, represented in the coalition by the Northern League.

Mr Fini said: "The National Alliance does not agree with the decision the prime minister took yesterday... Berlusconi has reinforced the already widespread negative impression that the League is the boss of the coalition."

But he said he would continuing supporting Mr Berlusconi in parliament.

The smallest of the four parties in the coalition, the Union of Christian Democrats, left last week after a heavy defeat for the prime minister in regional elections.

'Farce'

Parliamentary officials said the prime minister would put his case in speeches on Wednesday afternoon, first in the Senate and then in the lower house of parliament, the Chamber of Deputies.

Forza Italia, Mr Berlusconi's party, indicated on Sunday that if the UDC refused to rejoin the coalition it would call an early general election.

On Monday ministers suggested that Mr Berlusconi had accepted the demands and would resign so that he could form a new government and avoid elections.

But the prime minister emerged from a meeting with President Carlo Azeglio Ciampi, at which he was expected to tender his resignation, denying he had done so.

Initially, he would not shed any light on his plans.

"A surprise? This time it was me who surprised you," he said.

The centre-left opposition described Mr Berlusconi's actions as an "indecent farce".

"With his behaviour, the premier is making a mockery of his coalition, the institutions and the whole country at once," said Piero Fassino, leader of the Democratic Party of the Left.

Mr Berlusconi's strategy finally emerged on Tuesday morning, when parliamentary officials disclosed plans for a vote.

Popular opposition to Italy's role in the war in Iraq and a struggling economy have contributed to a decline in Mr Berlusconi's popularity.

The regional elections saw the opposition win 11 of the 13 regions up for re-election and around 54% of the vote.