ROME (Reuters) - Italy’s new prime minister threatened on Monday to resign if a plan to reduce the powers of the upper house of parliament, a central part of his ambitious constitutional reform agenda, is blocked.

Italian Prime Minister Matteo Renzi arrives to attend a meeting with U.S. President Barack Obama at Villa Madama in Rome March 27, 2014. REUTERS/Alessandro Bianchi

In the latest step of Matteo Renzi’s reform drive, the cabinet is due to approve a draft bill on Monday to transform the Senate into a non-elected chamber stripped of the power to approve budgets or hold votes of no-confidence in a government.

Renzi, who became Italy’s third prime minister in a year in February, has said that without a change in the system, the country risks being stuck with a rotating series of short-lived governments incapable of passing meaningful economic reforms.

“I have put all my credibility into this reform; if it doesn’t succeed, I can only assume the consequences,” Renzi, Italy’s youngest prime minister at 39, told the Corriere della Sera newspaper.

Renzi, head of the center-left Democratic Party, made a similar threat to quit over Senate reform on March 12 while pushing through a package of tax cuts aimed at reviving Italy’s sluggish economy, the third largest in the euro zone.

The former mayor of Florence came to power after a party coup, taking over the unwieldy cross-party coalition formed after last year’s deadlocked election which left no side able to govern alone.

BLOATED POLITICAL SYSTEM

His bill would scrap the current fragmented system, which grants equal powers to the Senate and the lower house Chamber of Deputies but elects them by different rules which make it hard for any group to win a stable overall majority in parliament.

The reform is a key part of a wider drive to slim down Italy’s bloated political apparatus, which comprises 950 Senators and deputies - almost twice as many as the 535-strong U.S. Congress - as well as many thousands of local politicians.

But despite loud public calls for change from all sides of the political spectrum, the reform is expected to encounter strong opposition from many in the 320-strong upper house who will have to vote to scrap their own jobs.

Another proposal, to cut layers of local government, had to be forced through the Senate last week with a confidence vote after it ran into heavy opposition in committee.

Changing the status of the Senate is bound up with a separate reform of the electoral law intended to favour strong coalitions in the lower house which Renzi has said he wants to see approved in parliament by the end of May.

Final approval of the Senate reform will require a constitutional change expected to take as much as a year to complete but the bill has already come under fire from politicians and some constitutional experts.

On Sunday, the speaker of the Senate, former anti-mafia prosecutor Piero Grasso, criticised Renzi’s proposal to make the upper house a regional chamber of city mayors and insisted it should include directly elected representatives.