Umberto Bossi resigns

Umberto Bossi, the firebrand leader of Italy's opposition Northern League party, has resigned after allegations that taxpayers' money was used to pay for renovations at his villa and holidays for his children, the party has said.

The move, announced at a meeting of the league's federal council in Milan, is likely to destabilise the populist, anti-immigration party, weakening one of the main political forces opposing Prime Minister Mario Monti's austerity programme in parliament.

Earlier this week, prosecutors placed Francesco Belsito, the party's treasurer, and two other officials under investigation over accusations of fraud and illegal party financing.

Belsito allegedly used the party's funds to pay for the personal expenses of Bossi's sons, including travel, dinners, hotel accommodation and expensive cars, as well as improvements to the leader's house.

Bossi, 70, is not under investigation and has denied ever using the party's money for his or his family's benefit.

The Northern League (Lega Nord) is the only party in opposition to the current technocratic government led by Prime Minister Mario Monti.

News of Bossi's resignation emerged on Thursday, with no comment from the leader himself.

Bossi has been one of the most colourful figures on the Italian political stage, coming to prominence on a separatist platform, our correspondent says.

In fiery speeches he frequently criticised "the corrupt and lazy South" for draining hard-earned wealth away from the North.

Bossi once described the European Union as a nest of communist bankers and freemasons.

Despite the rhetoric, the Northern League formed coalition governments with the right-wing parties supporting the governments of Prime Minister Silvio Berlusconi.

Following his resignation the party instantly gave him the honorary position of president.

Bossi's resignation is likely to open a power struggle within the league, and could pave the way for the emergence of Roberto Maroni, the former interior minister, as a new leader.

A party statement said on Thursday that Maroni, together with two other senior party officials, will temporarily lead the league until a congress of the federal council is held by the autumn.

Maroni, popular grass-root supporters, has condemned the scandal and called for a thorough clean-up within the party.