Italy's former premier Berlusconi loses final appeal in landmark case

Supreme Court upholds tax fraud sentence of 76-year-old tycoon

Italy's ex-leader Silvio Berlusconi has lost his final appeal against a tax fraud sentence in a ruling that jolted the political establishment on Friday but left the government in place for now.

The country's highest court on Thursday handed the billionaire tycoon his first definitive conviction in a 20-year political career that has been dogged by legal woes and sex scandals.

The court ordered the three-time former prime minister to do a year of community service or be placed under house arrest once his parliamentary immunity is lifted - an unprecedented verdict.

It also said an appeals court should rule on whether he should be temporarily banned from public office, a decision that would eject the 76-year-old from parliament for the first time since 1994.

An embittered and visibly shaken Berlusconi delivered a video message on Italian television late on Thursday in which he dismissed the sentence as baseless and vowed to continue his political career.

"For the commitment I have shown these past 20 years for my country and as I reach the end of my active life, I have been rewarded with accusations and a sentence based on nothing at all," Berlusconi said.

"This is a country that does not know how to be just," he said, speaking from his luxury residence in central Rome, adding that the sentence "takes away my personal freedom and political rights. No one can understand the real violence which has been directed against me."

Rallies for and against

Groups of Berlusconi supporters and opponents held small rallies outside the courtroom and near his residence and police blocked off his street for several hours.

A roar went up from anti-Berlusconi campaigners when the verdict came, with one elated activist holding up an image of Berlusconi behind bars.

"This is how we want Berlusconi," the sign read.

Pro-Berlusconi campaigners instead lowered their flags and ceased chants of "Silvio! Silvio!" after initial cheers when they misunderstood the verdict.

Berlusconi's lawyers, who have repeatedly condemned the legal attacks against him as politically motivated, said they were weighing a possible appeal to the European Court of Human Rights.

Italian Prime Minister Enrico Letta meanwhile called for calm amid fears of a split in the already fractious ruling coalition, which includes Berlusconi's People of Freedom party.

Berlusconi repeatedly stressed ahead of the ruling that he would not end his support for the government and he made no mention of the cabinet on Thursday in what analysts took as a positive sign.

The conditions of Berlusconi's sentence are still to be determined but experts say he may need permission from prosecutors to carry out political activities and could be excluded from running for office again.

The Italian Senate will have to vote to lift Berlusconi's immunity before the sentence can be implemented - a process that could take weeks or even months depending on the political situation.

The current government was installed following a two-month deadlock between Berlusconi's center-right coalition and a leftist grouping led by the Democratic Party after close-run February elections.

The case against Berlusconi revolved around film distribution rights purchased by his business empire Mediaset - the starting point for his first foray into politics in the early 1990s.

The verdict was Berlusconi's second and final appeal in the case, which first went to trial in 2006.

He is also appealing convictions in other cases for having sex with an underage prostitute, abusing his prime ministerial powers and leaking a police wiretap to damage a political rival.

Prosecutors have also filed charges alleging he bribed a senator to join his ranks in a move that helped bring down the government in 2008.

AFP-Reuters