The opposition threatened on Thursday to block government immigration reforms via a referendum if necessary, saying the country would be flooded with immigrants if the changes became law.
The centre-right alliance headed by former premier Silvio Berlusconi said it would do its best to defeat the immigration bill in parliament, particularly the Senate, where the centre-left government holds a wafer-thin majority.
It said that if this failed and the bill became law, it would immediately launch a public referendum campaign to get it overturned.
"We will put up a very tough fight both in parliament and across the country," said Berlusconi's Forza Italia party, which claimed the planned reforms would create a crime wave.
The bill, drawn up by Interior Minister Giuliano Amato and Welfare Minister Paolo Ferrero and approved by the cabinet on Tuesday, would make it easier for immigrants to enter Italy through legal channels, taking away the need to have a job contract before they arrive.
It would allow Italians to stand as guarantors, or 'sponsors', for would-be immigrants.
Highly skilled or "talented" foreigners with expertise in fields such as science, culture, sport and entertainment would be eligible for fast-track residency permits, similar to points-based systems in use in other countries.
Immigrants who can prove they have sufficient funds to support themselves would also be granted temporary permits and six-month permits would be introduced for immigrant job seekers already in the country.
Another key change would be a reduction in the number of Italy's controversial migrant holding centres from 14 to just five.
Although immigrants awaiting expulsion will still be held in the centres, they will no longer be used to house newly arrived foreigners while they are identified.
Non-governmental organizations and the media will also be granted access to the centres as a safeguard to ensure the rights of detainees are properly respected.
The government says the reforms are essential for tackling rising illegal immigration, arguing that the law approved by the previous, Berlusconi government in 2002 is not working.
That law was penned by Berlusconi allies Gianfranco Fini, the head of the rightist National Alliance (AN), and Umberto Bossi, chief of the devolutionist Northern League.
It has been criticised because it ties residency permits to jobs. Only those non-European Union foreigners already in possession of an Italian work contract are allowed to enter the country and gain a residency permit.
The permit lasts two years and should the immigrant lose his job before its expiry date, he or she is required to leave the country almost immediately or else become illegal.
Fini stood by the legislation this week, saying his law worked perfectly well but was not being applied properly.
"The government's right when it says there are too many illegal immigrants but that isn't because our law has failed. Instead it's because in the majority of cases, magistrates fail to carry out expulsions," he said.
The former foreign minister said the immigrant sponsor idea was "ridiculous" and had been experimented with in the past with "disastrous" results.
"The government has decided to allow anyone who wants to come here to do so legally, and this will create thousands of problems," Fini concluded.
Northern League House whip Roberto Maroni called on the European Commission to intervene, saying: "I hope the EC wakes up and speaks out because this law is an explosive one not just for Italy but for the rest of Europe as well".
Minister Ferrero responded to the attack, accusing the opposition of trying to "stir up and exploit social fears".
"They're talking about a referendum even before they've looked at the bill," he said.
The bill has already won praise from leading organisations working in the immigration sector. The United Nations Refugee Agency (UNHCR) said it viewed the measure "favourably, for its efforts to reduce the causes of illegal immigration".
Italy is a popular destination for would-be immigrants seeking a gateway into Europe, and thousands leave from north African ports every year, heading for its southern shores.