Prodi's coalition at risk as ally threatens to quit

The Italian Prime Minister, Romano Prodi, stared disaster in the face yesterday as a crucial coalition ally threatened to resign and withdraw his party's support.

On the eve of a key budget vote in the Senate, Mr Prodi was told by the Infrastructure minister, Antonio di Pietro, that his government was beginning to behave like that of Silvio Berlusconi. Mr di Pietro said that an amendment smuggled into the Budget bill by coalition lawmakers in the south was "disastrous for the credibility" of the government, "an amendment which shows us behaving like Berlusconi". He demanded immediate "clarification" on the issue if his party, "Italia di Valori" was "to remain inside the governing coalition".

Mr di Pietro became an Italian national hero in the early 90s when he was one of the campaigning prosecutors behind the "Tangentopoli" bribery scandal which caused the meltdown of the main political parties.

He is now a politician and his Italia di Valori party put 17 deputies and five senators in parliament in April's general election. Mr Di Pietro was rewarded with the job of Infrastructure minister.

But he has repeatedly been at odds with the government, especially the Justice minister, Clemente Mastella, and yesterday he threatened to resign and pull his party out of the government - a move that could bring it down.

At issue was a small clause, number 1.346, inserted as one of a host of amendments to the Budget. Its effect would be to give a drastically short expiry term for crimes committed against the state, including attempts to defraud the equivalent of the inland revenue.

The clause seems to have been slipped into the Budget at the instigation of politicians in Calabria who are under investigation for offences of this sort - and who stand a good chance of being let off completely if the bill goes through.

To Mr di Pietro and others the clause is dangerously reminiscent of the notorious "ad personam" laws forced through by Mr Berlusconi, decriminalising accounting fraud, for example, and shortening the term of limitations of offences for which his friends and allies were on trial.

According to the Court of Accounts, which spotted the clause, 70 per cent of trials involving such offences could be killed off by the new law.

Mr Di Pietro's threat was only one of a host of setbacks that has shrouded Mr Prodi and his government in gloom. The unpopularity of his tax-raising budget has caused a slump in government support from 63 per cent in July to 38 per cent now, and the mild-mannered Mr Prodi finds himself booed and whistled when he appears in public.

Although he has been in power for eight months, a large sample of votes in the general election are to be recounted to check for fraud, a process that could take nine months. It will not alter the result of the election, but it is one more shadow that the government does not need.

With local elections due in the new year, the major parties in the ruling coalition are beginning to show signs of panic. Unless the government's popularity improves, the elections could be a disaster for them.

Ten years ago, in 1996, Mr Prodi was dumped as prime minister as a result of similar tensions within the ruling coalition, and there is speculation that the same could happen again.

The chubby economic expert who was a lacklustre president of the European Commission is a former Christian Democrat, but today he has no party affiliation. He has twice proved he can win elections. It's what comes next that he is not so good at.

The threatened rebellion by Mr di Pietro could be defused if the government can find a way to replace the offending clause without having to submit the Budget to parliament all over again. One government figure said yesterday that a decree law could do the trick.