Italy's Prime Minister Silvio Berlusconi has publicly rebuked a key ally over comments that the country's political system has been condemned to death.

Northern League leader Umberto Bossi questioned Italy's future as a unified country. He criticized the fact that rich northern regions have to subsidize the poorer south and called for independence for northern Italy.

In a statement Monday, Mr. Berlusconi said that he “firmly disagrees with his friend and deeply believes that Italy will always exist.”

The discord comes at a time of heightened tension in Berlusconi's ruling coalition over a $65 billion austerity package adopted in mid-July and aimed at balancing the country's budget by 2013. The austerity decree must be approved within 60 days by the parliament.

Finance Minister Giulio Tremonti said recently tough measures would be necessary for Italy to make good on its promise. They include higher taxes, salary cuts to public officials, changes in the retirement age, and moving some holidays to Sunday to increase productivity.

Mr. Berlusconi said the government would also seek to win approval for a constitutional amendment requiring it to balance its annual budgets.