The resignation of Italy's industry minister underscores the vulnerability of Prime Minister Silvio Berlusconi's coalition to corruption investigations, although his government is not in imminent danger of collapse.

"This has cast a dark shadow over the whole government and its largest party," leading commentator Stefano Folli wrote in the authoritative financial daily newspaper Il Sole.

A day after Claudio Scajola stepped down, commentators said Berlusconi had made an error of judgment by defending his key ally long after it became clear to many that his position had become untenable and his resignation inevitable.

Folli was one of several commentators who said the resignation of Scajola, whose ministry is one of most powerful and economically influential, could be just the tip of an iceberg of possible corruption problems for Berlusconi.

Scajola resigned after it was discovered that some €900,000 of cashier cheques used to buy his luxury Rome apartment overlooking the Colosseum came from a constructor arrested in a political corruption probe. He denies any wrongdoing.

The Berlusconi government was already wobbly because of a public clash between the prime minister and his top conservative ally, parliamentary speaker Gianfranco Fini.

Several newspapers, including Corriere della Sera and La Stampa, said yesterday that Berlusconi feared a "domino effect" if investigations into alleged corruption in public works contracts spread to implicate others in his coalition.

Yesterday, Denis Verdini, one of the three national co-ordinators of Berlusconi's People of Freedom coalition, was put under investigation for corruption, judicial sources said.

In a front-page editorial titled 'Out with the truth', Corriere della Sera said Italy's political class had to shed "that sense of careless impunity" and behave in an ethical way.

The euro zone's third largest economy has been one of the most sluggish in the 16-nation bloc for well over a decade and the last thing the country needed is a power vacuum at a ministry such as that headed by Scajola.

Scajola, 62, has been a key driver of Italy's revival of nuclear energy and in other power schemes, including efforts to make Italy into a natural gas transhipment hub for Europe.

Berlusconi was due to take over the ministry in the interim.

Scajola is not yet under investigation and is due to be questioned by anti-corruption magistrates later this month.

Berlusconi government has already been rocked by a series of corruption scandals, the latest in February when police arrested four people including the constructor and Angelo Balducci, the former head of the government department that oversees public works.

Balducci and the others were accused of orchestrating a web of corruption and kickbacks among constructors, architects and civil servants who managed tens of millions of dollars of public works contracts.

Scajola's name surfaced in the probe that led to the arrests.

His resignation hit Berlusconi but the prime minister's rift with Fini, the lower house speaker, is still simmering.

Fini has accused Berlusconi of stifling debate within the centre right and of giving too much power to the Northern League, the other pillar of the coalition which made impressive gains in March's regional elections. – Reuters