A row between Italy's populist government and the EU could sink hopes of ending Europe's longstanding crisis over migrants, and even raises doubts about Rome's place in the bloc, analysts and officials say.

Despite a sharp drop in asylum seekers entering Europe since a 2015 peak, Italy is turning away ships with migrants rescued at sea in a campaign to make EU countries take their share.

In the latest standoff, Rome has threatened to cut its annual contribution to the EU budget, triggering a warning of sanctions from Brussels and dark threats that it would be breaching the very treaties that underpin the bloc's existence.

The increasingly bitter dispute highlights how elusive a three-year search for EU solidarity on migration has been -- a problem some warn could even sink the post-war European project.

"We do have a crisis of solidarity," Marie De Somer, an analyst with the Brussels-based think tank European Policy Centre (EPC) told AFP.

Despite an apparent deal by EU leaders meeting in Brussels on June 29, Italy has continued to reject rescue ships until EU countries agree to take their share of migrants.

Nearly 140 migrants who had been stranded on the Diciotti coast guard ship at a port in Sicily were allowed to disembark on Sunday after Ireland and non-EU member Albania agreed to take some of them in.

But the European Commission, the executive of the 28-nation bloc, is still trying to broker a deal for a permanent mechanism among EU countries to take in migrants aboard these ships.

- 'Heavy sanctions' possible -

As the week-long standoff over the Diciotti worsened on Friday, Deputy Prime Minister Luigi Di Maio warned that Rome could cut its funding for the bloc.

"The European Union has decided to turn its back on Italy once again," complained Di Maio, from the populist Five Star movement, which is in coalition with a hardline anti-immigration party.

The European Commission, which coordinates migration policy, said the EU "operates on the basis of rules, not threats" as it hit back at Di Maio's comments.

Guenther Oettinger, the EU's budget commissioner, warned Italy would be running risks by becoming the first in EU history to refuse to pay its budget contribution.

"This would result in late payment interests. And a breach of Treaty obligations leading to possible further heavy sanctions," Oettinger warned on Twitter.

The EPC's De Somer said the split is not as deep as it seems as the Commission and the European Parliament both back Italy's demand that other member countries share more of the responsibility for migrants.

"It's the same policy Italy is advocating for," De Somer told AFP.

The problem is with many EU member countries -- particularly with the former communist states in eastern Europe that refuse to admit asylum seekers.

"There is no worse deaf person than someone who doesn't want to hear," Sylvie Guillaume, a member of a European Parliament committee dealing with migration, told AFP.

Countries led by Hungary rejected an EU scheme agreed in 2015 to relocate 160,000 Syrian and other asylum seekers from Italy and Greece, the main landing points during Europe's worst migration crisis since World War II.

- 'No longer alone' -

Under international law, EU countries must grant asylum to people fleeing war and persecution but not to those escaping poverty and seeking jobs, who can be sent back to their countries, especially in West Africa.

Italy has pleaded for distinguishing genuine asylum seekers from economic migrants before they disembark from ships, and has gradually hardened its tone.

Even though Italian Premier Giuseppe Conte proclaimed Rome was "no longer alone" after the June summit, his government is increasingly sceptical of the results.

The summit called for setting up "disembarkation platforms" outside the bloc, most likely in North Africa, in a bid to discourage migrants boarding EU-bound smuggler boats.

But so far no deals have been struck.

"It will take enormous diplomatic and financial capital, and it will take years before they even start working," De Somer said.

The summit also called for EU states to set up migrant processing centres -- but while they all welcomed the plan, no one has volunteered to host one.

"You'll still have to agree on which member states will take how many refugees," Somer said.

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