An investigation into fraud and illegal funding at Italy’s Northern League party is undermining the leadership of founder Umberto Bossi.

Premier Silvio Berlusconi urged lawmakers to support him in looming no-confidence votes, saying bringing down his government would be ‘folly’.

Italians on Tuesday got their first taste of life under their new government as Silvio Berlusconi moved to appease the newly powerful Northern League with pledges of lower taxes,…