Italy’s government has vowed that its new austerity package will slash the country’s huge bureaucratic costs, with thousands of jobs and local elected posts being gradually eliminated.

A Cabinet minister resisted calls for his resignation today, after his decision to wear a T-shirt featuring cartoons of the Prophet Muhammad was blamed for sparking deadly clashes at an Italian consulate in Libya.

An Italian cabinet minister from a right-wing party was today quoted as he planned to wear T-shirts bearing some of the prophet cartoons which have inflamed much of the Muslim world.