UPDATE 1-Peruvian president threatens to dissolve Congress unless anti-graft reforms passed

Peruvian President Martin Vizcarra on Wednesday threatened to dissolve Congress unless his anti-graft proposals are passed, raising the stakes in a power struggle with the opposition that could usher in a new period of political turmoil in one of Latin America's most robust economies.

Invoking a constitutional measure that allows presidents to call new legislative elections if Congress votes against his government, Vizcarra said policies he has proposed to end entrenched corruption were the centerpiece of his administration. He accused lawmakers of forging a "pact of impunity" with the suspects of corruption investigations. "I've said it before and say it again today. Our firm decision to correct and change the political and justice system affects powerful interests that are protected by unscrupulous politicians," Vizcarra said in a televised message, flanked by his Cabinet and regional governors.

The move immediately triggered cries of "coup" from allies of opposition lawmakers on social media, and could stir some debate over its legality, potentially turning into a constitutional crisis that could detract from the government's efforts to build infrastructure and pass a labor reform package. But Vizcarra is betting that most Peruvians support him over Congress following back-to-back graft scandals that have that have widely discredited Peru's institutions in recent years.

A business-friendly former vice president, Vizcarra took office a little over a year ago after his predecessor resigned in disgrace - one of several politicians entangled in a bribery probe involving Brazilian builder Odebrecht. Vizcarra's approval rating rose last year after he adopted a tougher stance with Congress, but has sunk in recent months as lawmakers have resisted passing his proposals for cleaning up the political and judicial system.

Vizcarra's political reform package has languished in commission and the opposition has balked at proposals to strip lawmakers and other officials of immunity from prosecution. One congressman who is the target of a criminal probe, proposed legislation to punish prosecutors who leak information to the press. "They keep putting up obstacles, building a system of impunity and doing all they can to keep Peru from progressing," Vizcarra said. "It's unacceptable."

Shortly before Vizcarra spoke, the chief justice in Peru's highest court warned that the so-called "question of confidence" vote that Vizcarra requested from Congress should only be used judiciously and when all attempts at dialogue had failed. "Democracy is tolerance," Ernesto Blume, the president of the Constitutional Tribunal said in a televised interview with broadcaster Canal N.

If Congress issues a vote of no-confidence over the reforms, new parliamentary elections could be held as early as this year. Vizcarra did not say when he and his prime minister would formally present the question of confidence vote in Congress.