Euro zone leaders have welcomed Italy's pledges to balance its budget and implement reforms while saying it must stick to the vows to prevent the country from falling prey to the debt crisis.

EU president Herman Van Rompuy said at the close of two successive summits that European leaders "welcomed the clear commitment of Italy to achieve these objectives and abide by the time it set itself".

European Commission President Jose Manuel Barroso said that Rome had made some "very concrete" pledges, but added: "The key is implementation. It is not enough to make commitments."

Italian Prime Minister Silvio Berlusconi was under intense pressure at the summits yesterday and on Sunday to prove his resolve to undertake austerity measures aimed at easing fears that the euro zone's third biggest economy risks a financial meltdown.

He wrote a letter outlining plans to tackle concerns over Rome's giant debts by November 15, and setting out Italy's intentions to grow its economy.

Europe has demanded that Italy slash its €1.9 trillion debt pile, equal to 120% of GDP, and enact structural reforms - including raising its retirement age, a proposal which has caused tensions in the governing coalition.

While Berlusconi's real battle was to convince his 16 fellow euro zone states in overnight talks, the scandal-hit, billionaire media mogul "left a good impression" on his European Union partners, said Poland's premier Donald Tusk.

Among other commitments made, the Italian government has said companies would now be freer to lay off staff while it would also adopt a similar stance on civil servant employment.

The Italian premier was put on the spot by his EU peers, responding that he did not need to be given "lessons" from other leaders with high debt levels themselves.

His Northern League coalition partner stubbornly rejected any plans to change the current pension system whereby workers can retire after 40 years of contributions regardless of age - a key issue for voters in its northern Italy stronghold.

Widespread embarrassment in Italy over the EU's public warnings to sort out its economy and fierce wrangling within the fractious coalition sparked talk the government might fall.

While Berlusconi's People of Freedom party supported modifying the pension system, the Northern League had threatened to pull out of the coalition and bring down the government if extensive changes were made.