Italian Prime Minister Silvio Berlusconi has drawn up a deal with his key coalition ally under which he will step down at the end of the year, the La Repubblica newspaper reported on Wednesday. As part of the “secret pact,” which came during late-night talks between Berlusconi and Northern League leader Umberto Bossi, the 75-year-old will resign in return for Bossi accepting a pension age increase, according to the paper. Italy, which is running a 1.8 trillion euro public debt, has been under immense pressure from the EU to reform its pension system and raise the retirement age. The Northern League denied the report, which came just hours ahead of a crucial EU meeting in Brussels, telling the BBC it was an attempt to undermine Berlusconi. “Don’t make a fool of me in Brussels, and I promise that we’ll go to elections in March,\" Berlusconi told the Northern League leader, according to La Repubblica. Observers said Berlusconi might be hoping he would be re-elected at next year’s polls.