By William Horsley BBC European affairs analyst

Things are getting serious for Silvio Berlusconi.

The Italian leader is faced with another general strike, a grave crisis at over mass lay-offs at Fiat, and accusations that he has meddled with the law to save himself from possible conviction in a corruption trial.

Early this year he survived a period of near-isolation within Europe, after he dismissed his Europhile foreign minister, Renato Ruggiero, and was taken to task by international legal experts for allegedly undermining the rule of law.

Fiat's redundancy plans have sparked big protests

A much-publicised loss of temper in front of other European leaders at an EU summit late last year caused deep embarrassment.

Mr Berlusconi has so far battled his way out of trouble.

He took over the foreign ministry post himself. He forged a key alliance with Britain's reforming prime minister Tony Blair, in a challenge to the traditional leadership of the EU by Germany and France.

And he is trying to fulfil his ambitious plans to reform Italy's labour laws, the most rigid in western Europe, to make it easier for employers to hire and fire workers.

There is a new and ugly scent to Italian politics in this highly-charged atmosphere

But critics say his high-handed, presidential style has brought few positive results.

Business leaders are unhappy that Mr Berlusconi has watered down his key labour reforms, so they will help only a limited category of small businesses.

Yet Italy's trade unions are still preparing for a general strike on Friday.

Many teachers have also gone on strike this week to protest at budget cuts.

A long and bitter struggle lies ahead between government and organised labour from now on.

Missing the Midas touch

Mr Berlusconi is Italy's biggest business tycoon, with huge interests of his own in publishing and the media.

Yet he has so far failed to show his Midas touch on the economy as a whole.

Italy's privatisation programme is stalled. Tax revenues are falling.

Industrial problems could rebound on Berlusconi

And Fiat, the paramount symbol of Italian industry, is in crisis.

The risk of closure hangs over its large plant near Palermo in Sicily, with major social and perhaps political consequences.

Silvio Berlusconi has a comfortable parliamentary majority for his coalition government, made up of his own Forza Italia party, with the post-fascist National Alliance and the Northern League which wants autonomy for Italy's rich northern provinces.

But the way he is using his political power in what he has called a "war" with Italy's judiciary has already, in the view of critics, brought the whole country into disrepute.

High-profile campaigners oppose Berlusconi's legal reforms

Last week, law-makers shouted and exchanged blows with each other in parliament on live TV, as the government voted through a change in the law which is likely to have the effect of blocking the trial in which both Mr Berlusconi and his former defence minister Cesar Previti are charged with bribing a judge to win control of a big state-owned food company in the 1980s.

The law gives defendants new rights to choose which judge should preside at their trial, if they have a "legitimate suspicion" that the judge is biased.

Parliament has already approved rules on "conflict of interest" which Berlusconi's opponents call a mockery because they allow him a near-monopoly of control over Italian broadcasting.

All these things have provoked outrage among liberal-minded Italians. There have been mass demonstrations against the new "war on the judges" as well as the old disputes over workers' rights.

Nationalist upsurge

There is a new and ugly scent to Italian politics in this highly-charged atmosphere.

Nationalist and revisionist sentiments have reappeared in advance of the coming 80th anniversary, on 28 October, of Benito Mussolini's March on Rome, which heralded Italy's pre-war fascist era.

Mr Berlusconi came to power promising more efficiency, and leadership to make other countries respect Italy more.

He has many battles to win before he can claim those aims have been achieved. His opponents say he has already ruined Italy's reputation.