Rome: The Italian government has agreed to abolish public funding of political parties, Prime Minister Enrico Letta announced.
"In the cabinet, we reached an agreement to abolish public funding of the parties," Letta wrote on his account in the micro-blogging website Twitter, following a cabinet meeting Friday.
He said the government will now draft a bill proposing rigorous transparency rules for party accounts and statutes, tax breaks and simplified procedures for private party donors and mechanisms to ensure the traceability of these funds.
Italy`s established parties and politicians have been tainted by numerous corruption and embezzlement scandals at national, regional and local level, angering voters in the recession-hit country.
The grassroots Five-Star Movement, which won about a quarter of the vote in the February elections put strong pressure on Letta`s centre-left Democrat party and the PdL to scrap public party funds.
A scandal sparked by the alleged theft of millions of euros from party fund of the conservative People of Freedom (PdL) led to the resignation of governor of Lazio, Renata Polverini, last year.
Party funding scandals have hit several other Italian regions including the northern Lombardy and Piedmont regions and the southern Campania region.
In April, a former treasurer of the federalist Northern League party was arrested on suspicion of money-laundering, fraud and embezzlement of party funds.