LISBON, Portugal - March 22, 2011 - Portugal's government is on the verge of collapse after opposition parties withdrew their support for another round of austerity policies aimed at averting a financial bailout.

The expected defeat of the minority government's latest spending plans in a parliamentary vote Wednesday will likely force its resignation and could stall national and European efforts to deal with the continent's protracted debt crisis.

The vote comes on the eve of a two-day European Union summit, where policymakers are hoping to take new steps to restore investor faith in the fiscal soundness of the 17-nation eurozone, including Portugal.

Last year, both Greece and Ireland had to accept multibillion-dollar rescue packages after markets lost faith in their governments' efforts to deal with their debt burdens.

By most measures, Portugal is one of the eurozone's smallest and feeblest economies but its financial collapse would likely trigger a fresh bout of nerves over other debt-heavy - and bigger - euro countries such as Spain, Belgium and Italy.

"Portugal seems very likely to become the third eurozone country to need a bailout," said Emilie Gay, European economist at Capital Economics.

The governing Socialist Party's parliamentary leader, Francisco Assis, made an 11th-hour appeal for opposition rivals to negotiate changes to the latest austerity package and ensure the government's survival. Prime Minister Jose Socrates, who heads the government, said he will no longer be able to run the country if the package is rejected.