Italy's new Interior Minister wants to re-impose border controls for travellers from Europe's passport-free Schengen zone as part of security measures to crack down on crime and immigration.
The package drawn up by Roberto Maroni, a member of the anti-immigration Northern League, would make illegal immigration a crime punishable by up to four years' imprisonment, according to details published by newspapers.
The package will be presented at a Cabinet meeting this week. It is expected to be one of the first decrees approved by Prime Minister Silvio Berlusconi's new conservative government, which was sworn in on Thursday.
One of the most controversial measures favoured by Mr Maroni is negotiating a suspension of Italy's obligations under the EU's Schengen scheme. The accord, between 24 of the 27 member states, lets travellers cross national boundaries without checks. The move is aimed mainly against Romanian immigrants and eastern European Roma people, who have been blamed for crimes in Italy.
Romania's Prime Minister denounced the plan saying it could fuel xenophobic attitudes towards Romanians.
"I want to stress that, unfortunately, because of the elections in Italy ... there were mounting statements that created a perception that there is a critical situation concerning Romanians," Prime Minister Calin Tariceanu told reporters.
"The feeding of xenophobic attitudes can have an impact on bilateral relations between Romania and Italy and this obviously is not in anyone's interest."
Mr Tariceanu said he would send Interior Minister Cristian David to Rome to discuss the issue.
He did not elaborate but said the Cabinet could provide Italy with a team of prosecutors and policemen to support the Italian authorities' efforts to combat crime.
Italian Foreign Minister Franco Frattini said Rome did not want ties between the two countries to be strained, but defended his government's plans to crack down on crime by immigrants. "Honest Romanians will be welcomed in our houses and our businesses; the dishonest Romanians, with the help of Romanian police, must be taken and sent back to their country of origin," he told Italian television.
Romania, which joined the EU last year, is not part of the Schengen scheme. Italian authorities say its nationals enter Italy without checks through neighbouring countries covered by the agreement.
The scheme allows for the suspension of the passport-free rules only for reasons of public order or national security. Some member states have re-imposed border controls for limited periods in the past for security reasons at international summits or high-profile public events.
Crime and immigration were an important issue in the campaign for last month's parliamentary election, which Mr Berlusconi overwhelmingly won.
Mr Berlusconi's new Foreign Minister, Franco Frattini, has said Italy should create a minimum income requirement for immigrants, including those from other EU countries.
The new mayor of Rome from the right-wing National Alliance party, part of Mr Berlusconi's People of Freedom coalition, has pledged to expel 20,000 immigrant criminals and knock down illegal camps put up mostly by Roma from Romania.
More than 500,000 Romanians are estimated to live in Italy, a number that Rome says has risen dramatically in the past year.