Italy’s far-right prime minister, Giorgia Meloni, has been accused of “splitting the country” after parliament approved a controversial bill granting regions more power, which critics say will increase poverty in the south. The change, approved by the lower house early on Wednesday after a fiery debate that lasted all night, is part of the government’s overhaul of the Italian state, including a bill approved by the upper house on Tuesday that would allow for the direct election of a prime minister. The “differentiated autonomy” bill, sought by the wealthy rightwing-led Lombardy and Veneto as well as the leftwing Emilia-Romagna, gives regions more power over how their tax revenues are collected and spent, and over public services such as health and education. The approval of the bill, which passed with 172 votes in favour and 99 against, was hailed by Matteo Salvini, the leader of Lega, the ruling coalition member which for years has championed the move, as “a victory for all Italians”. Meloni said it was “a step forward towards building a stronger and fairer Italy”, and argued it would “overcome the differences there are today between various parts of the country”. Critics say that if the wealthier regions are able to keep more of their tax earnings it will mean fewer financial resources for poorer regions, which are predominantly in the south. The measure was so bitterly contested it led to a brawl in parliament last week, with a politician from the opposition Five Star Movement needing medical assistance. The fight triggered a demonstration by opposition parties in Rome on Tuesday night, who said they were rallying “to defend national unity” in the face of the two bills and to protest against alleged “violence and intimidation” by the ruling coalition. Elly Schlein, the leader of the centre-left Democratic party (PD), said the measure was divisive and would increase inequality. “Meloni, the patriot who splits the country,” she said. “Brothers of Italy has bowed to Lega’s secessionist dreams.” The bill allowing the direct election of a prime minister is a significant constitutional overhaul which Meloni has vigorously promoted, describing it as “the mother of all reforms”. Under the proposal, the prime minister would be elected for five years and the coalition supporting the winning candidate would be given at least 55% of seats, a law Meloni argues would help end Italy’s revolving-door governments. Critics fear the bill, reminiscent of a constitutional change made by the fascist dictator Benito Mussolini about a century ago, could lead Italy towards authoritarianism. Any change to the constitution must be approved by both houses of parliament with a two-thirds majority. The upper house vote fell short, a result expected to be repeated in the lower house, meaning the bill will almost certainly be put to a referendum, which could be held in 2025.