  We report the detection of a zabs=0.3654 associated absorption-line system in
the UV spectrum of the CSS quasar 3C48. The absorbing material is blue shifted
with respect to the quasar emission-line redshift, zem=0.3700, suggesting an
outflow velocity of ~1000 km/s. We detect absorption lines over a range of
ionization states from Ly-beta, Ly-gamma, CIV, NIV, SVI to OVI and possibly OIV
and NeVIII. The kinematical properties of the absorption-line system are
similar to the blue-shifted emission line gas seen in [OIII]\lambda5007
(Chatzichristou, Vanderriest & Jaffe 1999), which is believed to have
interacted with the radio jet. We study the properties of the absorbing
material using CLOUDY and find that photoionization models with Solar abundance
ratios (with overall metallicity in the range 0.1<Z/Z$_\odot$<1.3) are enough
to explain the observed column densities of all the species except NeVIII,
detection of which requires confirmation. Since the cooling and recombination
time for the gas is ~10^5 yr, the consistency with the photoionization models
suggests that any possible interaction of absorbing material with the jet must
have taken place before ~10^5 yr. The abundance ratio of nitrogen to carbon is
close to Solar values, unlike in the case of most quasars, especially at
high-redshifts, which have super-Solar values. We observed 3C48 with the Giant
Metrewave Radio Telescope (GMRT) to search for redshifted 21cm HI absorption.
However, we did not detect any significant feature in our spectra and estimate
the 3-sigma upper limit to the optical depth to be in the range 0.001 to 0.003.
However, due to the diffuse nature of the radio source, optical depths as high
as 0.1 towards individual knots or compact components cannot be ruled out.
