Portugal's parliament will vote on its government's latest austerity measures tomorrow, setting the stage for a potential collapse of the minority Socialist administration a day before a European summit.

Portugese Prime Minister Jose Socrates has threatened to resign if the opposition fails to approve the measures. The main opposition Social Democrats are refusing to back them.

They have begun to talk about snap elections, complicating the country's drive to avoid following Greece and Ireland in taking a bailout.

'Tomorrow the resolution on the measures will be voted,' said lawmaker Heloisa Apolonia of the Green Party after a meeting of parliamentary leaders today.

The government had hoped to obtain support for its plan before a key European Union summit gathers on Thursday to approve a beefed-up eurozone rescue fund.

Francisco Assis, parliament bench leader for the Socialists, said there was still time for a compromise, while failure to pass the government measures would throw the country 'into an abyss'.

The latest, disputed measures include further spending cuts to ensure the government can reach a target of cutting the public deficit to 4.6% of gross domestic product after beating last year's goal of 7.3%.

Some analysts have said that markets have begun to price in a change of government and see a bailout as a near certainty.

Still, economic policy may not change much as the opposition is also broadly committed to the austerity path.