The resignation of iconoclastic leader Umberto Bossi, who had called for Italy to be divided into two countries, could prove to be a positive news for Italian Prime Minister Mario Monti.

The 70-year-old Northern League party leader resigned on Thursday amid allegations that his family members and key allies siphoned public funds destined for the party and spent them on holidays and luxury cars.

The development could not have come at a better time for Monti, who took over the reins of the Italian government last November after former prime minister Silvio Berlusconi stepped down amid his own scandals and fears that Italy could fall victim to a stubborn eurozone debt crisis.

During Monti's past five-month tenure, Bossi's allies in the Northern League have been his staunchest critics, regularly threatening to block legislation and monopolizing debates with long speeches.

A close ally to Berlusconi, Bossi has risen up from a local organizer to a political figure who remained alongside Berlusconi until he resigned last November during his three decades in politics.

But he was not a typical politician: his speeches were filled with vulgar language and he used mystical ceremonies to bind his supporters.

Bossi championed issues often unpopular on the European level, including strong stances against immigration, and a "devolution" plan aimed at shifting power from the national government to regional and local entities.

His calling for a breakup of Italy in the 1990s would have made the richer northern part of the country into a separate nation called Padania.

With Bossi's scandalous exit, the future of the Northern League was cast into doubt.

"Without Bossi, the Northern League will melt down," said pollster Renato Mannheimer, a political analyst. "The League is based on Bossi's will, and he will not easily be replaced."

If that is indeed the case, it could be a good news for Monti, who is in the process of pushing through a controversial labor reform package aimed at helping spark economic growth by making companies more likely to take on new workers through easing limits on firing employees.

The reform is mostly opposed by the country's powerful trade unions, but the Northern League was also among the strongest political opponents to the plan.

Before Bossi's resignation, Monti said he was mulling the use of a risky confidence vote to push the reform through.

If his government was defeated in a confidence vote, it would force him to step down.

It is not clear how Bossi's disgraceful exit will have impact on Monti's plans, but it is clear it will be easier to turn the plan into law.

Without its leader, the Northern League could prove to be a less effective opponent to the reform, making a confidence vote unnecessary. Or Monti could decide that a crippled Northern League would make winning a confidence vote easier, and so he could go that route as a way to sidestep the regular parliamentary debate.