Catholic Church chiefs in Italy have said they may start to pay tax on property they own - in a bid to help the country balance its books.
The figure could top £700 million per year, and the announcement comes as new Prime Minister Mario Monti revealed a £30 billion austerity budget.
Cardinal Angelo Bagnasco, leader of the all powerful Italian Bishops Conference, said he would be willing to look into paying the newly reintroduced property tax on first homes. Currently the Church is exempt.
Cardinal Bagnasco said: 'The Church is willing to review the agreements that extend to the paying of ICI on properties belonging to religious institutions. If there are points that need clarifying or reviewing then there will be no prejudgement from our part. The current norms are correct in that they recognize the social value of activities carried out by many non-profits, among them church ones, especially is used for social, cultural or educational reasons. It's also correct that if there have been concrete cases in which a tax that should have been paid wasn't, we should verify the abuse and end it.'
The Catholic Church in Italy is said to own 20 per cent of properties across the whole of the country.
They range from places of worship, convents, monasteries, schools, universities, hospitals and private health care clinics.
Five years ago Italy's parliament extended the property tax exemption to properties that were not solely commercial, such as clinics and convents and monasteries that allow paying guests to stay in bed and breakfast style accommodation.
Critics have pointed out that as Mr Monti, dubbed Super Mario, has called for Italians to 'make sacrifices' as they face the belt tightening austerity package brought in to reduce the country's 1.9 trillion Euro debt, then consequently the Church should make sacrifices as well.
Several Facebook campaigns have been started calling on the Church - which has enjoyed the privilege for almost 30 years - to pay its fair share and an online petition has attracted more than 120,000 signatures.
Controversial former prime minister Silvio Berlusconi refused to discuss the exemption and was a firm backer of it - in the hope that he would secure and reinforce Church support despite being embroiled in several sleazy sex scandals.
The Italian Radical Party, which has led the calls for the Church to pay the tax, has also complained to the European Union, saying that the exemption gives them an unfair economic advantage over rivals.
The European Commission placed Italy under investigation last year, saying it believed the exemptions could violate EU rules on state subsidies and could distort competition.
If the commission rules against Italy the EU could order the country to demand that the church reimburse the government for the unpaid taxes.
Radical Party secretary Mario Staderini said: 'Our investigations have shown that some church properties which are deemed as being exempt from taxes are in fact being run as profitable hotels or hostels - the prices they charge are in line with four star hotels.'
Properties that belong to the Vatican are exempt from Italian taxes altogether as they are considered to be part of a separate sovereign state following the signing of the Lateran Treaty between dictator Benito Mussolini and the Holy See in 1929.
Cardinal Tarcisio Bertone, the Vatican's Secretary of State and Pope Benedict's right hand man, has defended this exemption insisting that the Church provides help and support for the weakest and most vulnerable sections of society such as the homeless and hungry.
Anti sleaze party Italy of Values used a famous Biblical quotation to underline the unfairness.
Senator Felice Belisaro said: 'Our position is clear render to Cesar what is Cesar's and to God what is God's. The Church should pay ICI on buildings that it owns and which have a commercial use, to help save the country from the economic crisis that it is facing. The austerity package was called the 'Save Italy package' not the 'Save the Church package. It is completely unacceptable that the Church is covered by this privilege of exemption.'