Rome (Agencies): An Italian parliamentary panel gave a blow to beleaguered Prime Minister Silvio Berlusconi on Thursday by blocking a tax measure his Northern League allies have laid down as a condition for staying in government.

The committee of 30 members, which had to rule on steps to give more tax and spending powers to local governments, was split evenly, creating a standoff with the potential to break the centre-right coalition and open the way to early elections.

Northern League leader Umberto Bossi, who has the power to bring down the government, has vowed his supporters a deal on the package aimed at increasing local autonomy and cutting subsidies from the prosperous north to the poorer south.

Before the ruling, he said that new elections would be required if the measures were not approved, but the party's leadership has been divided over what approach to take and he appeared to backtrack later.

Following a second vote on Thursday, when deputies rejected a investigation request by magistrates scanning allegations against Berlusconi of having sex with an under aged prostitute, Bossi put off any suggestions of early elections.

In formal terms, the committee's vote on the tax measures is not binding on the government, which has other ways of passing a package that has already been through several modifications and is in itself only part of a wider federalism programme.

However, the result has raised doubts about how long the Northern League will stand by Berlusconi, given that its solid regional base could give it a stronger position in a future centre-right government if a new election were held.