By Steve Scherer and Gabriela Baczynska
ROME/BRUSSELS (Reuters) - Italy's populist government said on Friday it would cut funds for the European Union unless other states take in boat migrants stranded in an Italian port, earning a rebuke from Brussels for making unacceptable "threats".
Italian Prime Minister Giuseppe Conte said that envoys from EU states who met in Brussels on Friday did not reach a deal to share out the 150 migrants on board the Diciotti, an Italian coastguard ship docked in Catania since Monday.
Italy will "act accordingly", he said on Facebook, noting the EU had failed to live up to its principles of "solidarity and responsibility" and that there was a gulf "between words and actions" that is coloured by "hypocrisy".
More than 650,000 people have reached Italian shores since 2014 and Rome has begun to take a rigidly anti-immigration line, saying it will not let any more rescue ships dock unless other EU states agree to take the people in.
Interior Minister Matteo Salvini, who heads the anti-immigrant League party, has insisted they will not be allowed ashore until other EU states agree to take them in - prompting a criminal investigation into whether the migrants are being held against their will.
Salvini seemed to give some ground in a radio interview on Friday evening, suggesting he might let migrants off the Diciotti once it had been ascertained whether they were "real refugees".
"I'm considering the possibility of carrying out identification and recognition procedures to identify real refugees, who are the minority, from fake refugees before they disembark," he told state broadcaster Rai.
Salvini's government ally, Deputy Prime Minister Luigi Di Maio, who leads the 5-Star Movement, has said his party will not approve next year's European Union funding if there is no action soon.
"The soft line does not work, the hard line will be to withhold funds if they don't listen to us," Di Maio said.
Rejecting the Italian threats as unacceptable, the EU's executive European Commission said a solution to the Diciotti case was its "main priority".
"Unconstructive comments, let alone threats ... will not get us any closer to a solution," spokesman Alexander Winterstein told a news conference on Friday.
The issue of how to handle migrants has bitterly split the EU, although arrivals are down dramatically from their 2015 peak of more than a million.
Southern EU states such as Italy and Greece feel overrun and the bloc's eastern members refuse to host any of the new arrivals.
The easterners, who face cuts in EU development aid over their refusal to help on migration, did not attend the Brussels meeting on Friday. Malta, Italy, Spain, Greece, Luxembourg, Belgium, Germany, France, Ireland and the Netherlands were present.
In Italy, a campaign promise to further curtail arrivals helped propel the 5-Star and the League into office last June.
Deals were reached in June and July to distribute people from ships that carried rescued migrants to Italy and Malta.
But Salvini this week said countries were failing to keep their promises.
Opposition politicians who visited the Diciotti this week condemned Salvini and Di Maio.
"The worst thing is that (the migrants) are being held hostage as a way of blackmailing Europe," said Laura Boldrini, a lawmaker for the left-wing Free and Equal party.
The migrants appeared to have started a hunger strike on Friday, Davide Faraone, a lawmaker in the opposition Democratic Party, said on Twitter.
Another opposition lawmaker, Riccardo Magi, said most on board could qualify for asylum.
Magi petitioned the Catania prosecutor to open a criminal investigation into whether the migrants were being held against their will. Agrigento's chief prosecutor has opened a probe against "unknown" persons for holding them.
On Friday, Salvini remained defiant in the face of the investigation and said it was his job to protect the country.
"If someone is thinking about arresting me, they're mistaken, because the Italian people are asking for order, rules, respect and controlled immigration," he said.
(Additional reporting by Philip Pullella and Gavin Jones in Rome, Philip Blenkinsop and Robert-Jan Bartunek in Brussels; Editing by Andrew Roche and Andrew Heavens)