Rousseff suffered a setback in the Chamber of Deputies Wednesday when several of her allies joined the opposition and the pro-farming bloc in refusing to vote on the World Cup bill as demanded by football's world governing body FIFA.
The opponents demanded that the government first agree to a vote on amendments to the forestry code that would ease restrictions aiming to protect the country's forests.
"Parties and lawmakers have decided to obstruct all the votes as long as there is no vote on the forestry code," said conservative deputy Rubens Moreira Mendes, head of the powerful farming bloc.
The setback highlights the tensions within the ruling coalition, which includes 10 parties demanding more attention, powers and representation and that Rousseff needs as her leftist Workers Party (PT) has only 85 seats in the 513-member House of Deputies.
"The government will have to alter its stance" and pay more attention to legislative affairs, said deputy Paulo Piau, a Forestry Code sponsor and member of the ruling coalition's centrist Democratic Movement Party who also joined the rebellion.
"Sometimes, lawmakers take decisions which annoy the government. Now the government needs to negotiate, return and resolve the issue," said Sports Minister Aldo Rebelo.
But he insisted that the delay in the vote "will not affect the schedule" of preparations for the World Cup and expressed confidence that Congress will pass the World Cup law in March or April.
The bill sought by FIFA since 2007 would notably lift a ban on beer sales in stadiums during the World Cup. The vote has been repeatedly postponed.
Sales of alcoholic beverages in sports arenas have been banned in Brazil since 2003, but the bill would create an exception, allowing beer to be sold in plastic cups at World Cup matches.
FIFA has an agreement with its sponsor, the US-based Anheuser-Busch brand Budweiser, and prohibiting beer sales would cut into the football organization's revenues from the games.
Rousseff is faced with "a scenario of legislative guerrilla," said the political consultancy firm CAC.
The crisis stems from "the huge size of the coalition and Rousseff's management style. She does not like to engage in politics with parliament, she prefers to deal with technocrats to resolve problems and members of Congress are used to being involved in public policy," said Carlos Lopes of the Analise think-tank.
Lopes said the issue will not be resolved with finality and the differences will resurface.
Three months before it is to host the Rio+20 summit on sustainable development, the government has signaled that it will not endorse the new forestry code if it involves a major rollback of protection for the environment and the Amazon forest to accommodate farming economic interests.
The bill, which is backed by the powerful agribusiness sector and has already been approved in the Senate, would allow huge areas of the country to be farmed if they were illegally logged before July 2008, and would allow farming along environmentally sensitive riverbanks.
It was initially intended as a bid to rein in unfettered logging, and increase protections of Brazil's forests, which play a key role in reducing greenhouse gases.
But farm-based economic interests prevailed, and the bill was reshaped to ease restrictions that have been in place since 1965 and are credited with curbing deforestation.
During her 2010 election campaign, Rousseff pledged to reject the legislation, which critics said encouraged deforestation.