Ally puts pressure on Berlusconi

Beleaguered premier Silvio Berlusconi has come under pressure on two fronts: his crucial coalition ally demanded tax cuts or early elections, and Italy's credit rating appeared in danger due to high public debt and a laggard economy.

The Northern League, Mr Berlusconi's main partner in the three-year-old government, wants more say on key policies as the premier's popularity slips.