All ministers from former Prime Minister Silvio Berlusconi's right-wing party resigned from the coalition government on Saturday, a spokesman for Deputy Prime Minister Angelino Alfano said. Berlusconi had earlier told ministers from his People of Freedom (PDL) party to consider stepping down in protest at Prime Minister Enrico Letta's order to freeze all decisions ahead of a confidence vote in parliament.

"The ultimatum sent by the prime minister and his Democratic Party to their government allies ... seems inadmissible and unacceptable," Berlusconi said in a statement on Saturday.

Letta returned from the UN General Assembly in New York on Friday to convene a Cabinet meeting to delay or avoid a planned sales tax rise and secure approval for budget measures to bring Italy's deficit within EU limits. Instead, he was forced to determine if lawmakers from Berlusconi's right-wing PDL still supported the 5-month-old government, after threats of rebellion from the media mogul's allies following the former prime minister's tax fraud conviction. Letta's center-left Democratic Party (PD) governs with the PDL in an uneasy alliance.

'Efficient government action'

Experts had expected Letta, who told the Cabinet he would enact no legislation until parliament resolved its political impasse, to ask for a confidence vote in the coming days. Berlusconi's loyalists threatened to quit if a committee voted to strip the former prime minister of his seat because of his conviction for tax evasion, which was upheld by Italy's top court in August.

"Efficient government action is obviously incompatible with the mass resignation of a parliamentary group which should support the government," Letta had said in a statement ahead of the PDL's actual stepping-down. "Either there is a new start and the interests of the country and its citizens are put first or this experience is at an end," he added, referring to the tense coalition.

Letta said there was an "impossibility of committing to measures worth billions of euros without a guarantee on the government's continuity."

Parliamentary maneuvers

The PDL had been pushing to delay the planned rise in sales tax, from 21 to 22 percent, but in doing so Italy would need to find about 3 billion euros ($4.05 billion) to make up the difference and bring the country's deficit inside the EU ceiling. The International Monetary Fund (IMF) warned on Friday in a new report on Italy's economy that coalition tensions posed a "key risk."

"The coalition government that took office in April is moving forward on the reform agenda, but faces political constraints," the IMF had warned in the report. "While the government maintains support in the parliament, tensions between the coalition partners are apparent and represent a key risk."

Fighting over the sales tax had been just the latest dispute in a string of bitter differences.

mkg/slk (dpa, Reuters, AP, AFP)