Premier Silvio Berlusconi met on Monday with the steering committee of his People of Freedom (PdL) party which gave its full support to the government's economic policy. In a statement issued after the morning encounter, the panel said there was agreement ''on the need expressed by the premier to focus on two equally valid necessities: maintaining fiscal rigor and supporting the economic recovery... especially at a time when there are signs of improvement in the economic crisis''. '

'These objectives are in line with the commitments made by this government and the majority which supports it'' in parliament, the statement added. The government's economic policy has been at center stage after it appeared that Berlusconi and his Economy Minister Giulio Tremonti were not be on the same wavelength.

This was best demonstrated by the premier's announcement last week that he would work to gradually eliminate an important corporate tax which generates some 40 billion euros a year in revenue for the state, much going to help regions cover the cost of the national health system.

The announcement apparently caught Tremonti totally off guard and contrasted with his declared position that tax cuts can only come about if there is a proportional cut in public spending or increase in alternative revenue. Some observers saw the incident as an indication that a growing number of people in the PdL, including ministers, are unhappy with the 'penny-pinching' economy minister who has scotched their efforts to boost public spending as a means to jump-start the economy. Though he is a member of the PdL, the strongest defense of Tremonti has come from the Northern League, the second party in the government coalition. Last Friday, Northern League leader and Reform minister Umberto Bossi said that ''there is an attempt to get rid of Tremonti but I'm here to protect him''. On Monday, Bossi threw his full support behind an idea of making Tremonti also deputy premier. The idea was apparently advanced by the economy minister himself in talks with Berlusconi and the Northern League leader at the weekend. Such a move would consolidate Tremonti's position against the PdL 'free spenders' and, according to Bossi, have a stabilising effect on the government as a whole.

However, there are many in the PdL opposed to the idea, including House Speaker Gianfranco Fini who said that this would limit the premier's freedom of action. Many observers see Fini, who was a deputy premier in Berlusconi's previous administration, and Tremonti as the main rivals to succeed Berlusconi as head of the PdL in the future. According to Defense Minister Ignazio La Russa - who is a member of the PdL steering committee along with Culture Minister Sandro Bondi and PdL charter author Denis Verdini - the possibility of appointing Tremonti deputy premier did not come up for discussion in Monday's meeting.

''And besides, what makes you so sure that's what Tremonti wants,'' La Russia quipped to the press after seeing the premier. The fact that Berlusconi sought the backing of PdL party leaders was seen by some observers as an indication that he wanted to share the responsibility of his decisions with the party rather than bear the weight all by himself. Evidence of this was the fact that it was also decided to move up a session of the PdL executive committee, originally scheduled for November 5, and follow this with meeting of the party caucuses in both houses of parliament. The agenda for these meetings, insiders said, would be political balances within the government, upcoming regional elections and policy decisions.