After weeks of tension, Prime Minister Silvio Berlusconi split with one of his major allies on Thursday night, weakening Italy’s center-right governing coalition and raising the possibility of early elections.
Mr. Berlusconi on Thursday called on Gianfranco Fini, the powerful speaker of the Lower House of Parliament, to step down, saying at a news conference that Mr. Fini’s positions were “absolutely incompatible with the founding principles” of the governing center-right People of Liberties coalition, which the two formed in 2007.
Upping the ante, Mr. Fini said he refused to resign, criticizing the prime minister at a news conference for lacking “a liberal concept of democracy.”
The standoff is the most serious political crisis that Mr. Berlusconi’s government has faced since it was elected in 2008, after two years out of power. Although Mr. Berlusconi said the government was not at risk of falling, it remained to be seen how the tense situation would play out.
A former fascist, Mr. Fini has moved to the political center in recent years, where his vocal defense of Italian institutions has won him plaudits among many Italians but left him increasingly at odds with the more personality-driven rule of Mr. Berlusconi, who has repeatedly accused him of disloyalty. (For his part, Mr. Berlusconi has taken to saying that it is “hell” to govern with the Italian Constitution.)
The crisis comes after weeks of baroque intrigue centered on judicial investigations that have focused on other Berlusconi allies on charges of corruption, just at the time several potential successors are jockeying for position in a post-Berlusconi Italy. The mandate of Mr. Berlusconi, 73, lasts until 2013.
Experts said the crisis could lead to early elections, in which Mr. Berlusconi could likely secure a majority even without Mr. Fini because of the strength in the coalition of the Northern League, a formerly separatist party with a strong base among workers in the North, whose point man in the government is the powerful and internationally respected finance minister, Giulio Trem
Asked by reporters on Friday if the break with Mr. Fini would lead to early elections, the Northern League’s colorful leader, Umberto Bossi, raised his middle finger in response.
Mr. Berlusconi said that his government was stable and that he would not remove any members of his cabinet.
The break comes after months of tension and open hostility between the allies. The prime minister’s party issued a document censuring Mr. Fini, a founder of the People of Liberties party, and accusing him of carrying on systematic attacks against the role and the person of the prime minister.
Mr. Fini said that he was not going to quit because his role as a speaker of the Lower House is to grant respect for the rules, not the ruling party. He is estimated to command 43 votes in the Lower House and Senate. On Thursday some of Mr. Fini’s supporters in the Lower House formed a new committee called “Future and Liberty for Italy.” Without these votes the current coalition may lose a majority at least in the Lower House.
Mr. Berlusconi’s government has already won a record number of 36 confidence votes in Parliament, a move that stakes the government’s survival and requires a strong majority. Pier Luigi Bersani, the center-left leader of the largest opposition party, asked Mr. Berlusconi to address Parliament on the what the left-leaning newspaper La Repubblica called the government’s “brink of crisis.”
In recent months, Mr. Fini has not endeared himself to Berlusconi allies with his calls for greater emphasis on morality in government and the resignation of officials implicated in judicial investigations. He also contributed to watering down a bill limiting the use of wiretaps by magistrates that critics say would restrict press freedom and hamper the fight against corruption.
The tense situation is causing further delays in the appointment of the new minister for economic development. The previous minister, Claudio Scajola, stepped down in May after an investigation into the awarding of public works contracts. Mr. Berlusconi has taken over the position, and with the turmoil in his government a new minister is not expected to be named by the end of summer.

Gaia Pianigiani reported from Rome and Rachel Donadio from New York.