Italy: Umberto Bossi urges Silvio Berlusconi to quit
Italian Prime Minister Silvio Berlusconi's key coalition partner has urged him to step aside ahead of a crucial budget vote.
Northern League leader Umberto Bossi is a volatile ally who brought down Mr Berlusconi's first government in 1994.
Mr Berlusconi's majority has crumbled ahead of the vote, with several MPs defecting or saying they will rebel.
Until now he has insisted he has enough support to be able to continue to govern and has denied he will resign.
While Italy's deficit is relatively low, investors are concerned that the combination of Italy's low growth rate and 1.9tn euro (£1.63tn; $2.6tn) debt could make it the next country to fall in the eurozone debt crisis.
Meanwhile Milan's blue-chip FTSE MIB stock index rose 2.5% on the news of Mr Bossi's statement. Markets had rallied in the morning on incorrect reports that Mr Berlusconi was stepping down.Test of strength
"We asked the prime minister to stand aside," Mr Bossi told reporters on the margins of parliament, adding that the former justice minister and personal protege of Mr Berlusconi, Angelino Alfano, should take over.
The Northern League is the second largest party in the coalition, with about 60 seats.
There's been much talk of defections from Mr Berlusconi's government. The parliamentary vote should reveal whether he still has the majority he needs to continue to govern. If the vote goes badly for the prime minister, there'd almost certainly be a confidence motion within days and then Mr Berlusconi might well be swept from power.
He, however, has remained full of fight. He says he has all the support he needs. But if he's right and he can indeed soldier on, Italy is likely to come under more financial pressure.
The international money markets no longer believe that Mr Berlusconi can repair Italy's economy and the country is being forced to pay higher and higher rates of interest.
The normally routine vote on approving state finances has taken on much more significance now as a test of Mr Berlusconi's political strength.
After late-night talks with his own party and Northern League leaders, Mr Berlusconi is reported to have said that he would wait to see the outcome of the vote before making a decision on his future.
One of Berlusconi's closest allies, MP Francesco Cicchitto, told reporters that leaders of the coalition would wait to see the result of the vote.
"One thing at a time. First the vote, let's let it happen. Then we'll reflect on the vote," Mr Cicchitto said.
Mr Berlusconi spent the morning attempting to shore up his support with those MPs who had threatened to abandon him ahead of the vote, which has now been delayed until 16:00 GMT.
Borrowing costs spike
Last month, the same budget measure was defeated in parliament by a single vote. Mr Berlusconi is reported to be short of the 316 votes - more than than half of the 630-member chamber - needed to prove that he still has a majority.
But analysts say Mr Berlusconi may still win as the centre-left may abstain, allowing the essential measure to pass.
Members of the opposition have said they will be present in the chamber, but will not vote, La Repubblica reports.
"Our message to the coalition is, 'be counted'," Pier Luigi Bersani, secretary of the centre-left Democratic Party said, according to the paper.
Who is Umberto Bossi?
- Leader of the regionalist Northern League party which provides Silvio Berlusconi with a parliamentary majority
- A former singer, aged 70, married (twice) with four sons
- Minister for Institutional Reforms in the Berlusconi cabinet
- Had a break from frontline politics after suffering a stroke in March 2004
Were Mr Berlusconi to lose, he could either resign immediately or be ordered by President Giorgio Napolitano to call a confidence vote.
The BBC's Alan Johnston, in Rome, says it is certainly worth remembering that Mr Berlusconi is a master deal-maker and political infighter, having survived more than 50 confidence motions in the past.
But this crisis is different as it goes beyond Italian politics, our correspondent says.
The international money markets are now forcing Italy to pay interest rates that could eventually ruin it, which means the pressure on Mr Berlusconi is extraordinary, he adds.
Doubt about Italy's governance and its ability to repay its debts have sent the markets seesawing over the past two days.
On Tuesday, the cost of government borrowing spiked at a new record of 6.74% because of the crisis, just short of the 7% threshold at which Portugal and Ireland were forced to accept bailouts.