Prospects for long overdue economic change in Italy appeared in jeopardy yesterday after the ruling centre-left coalition made concessions to taxi drivers that consumer groups and the political opposition termed a defeat for government reformers.

After a four-day strike that caused travel chaos across Italy, the taxi drivers forced the government of Romano Prodi, prime minister, to withdraw a proposal to increase the number of taxi licences and inject more competition into one of the country's most protected services.