Berlusconi is accused of ordering the payment of at least $600,000 to British lawyer David Mills - whose indictment also was being sought - in 1997 in exchange for the lawyer's false testimony in two trials against Berlusconi.

Both men deny the allegations.

A spokesman for the prime minister rejected on Friday as "false theories" the prosecutors' accusations.
   
Fabio De Pasquale, a  prosecutor, said Mills, who is married and formally separated from British Culture Secretary Tessa Jowell, was accused of giving false testimony in two hearings, in 1997 and 1998.

Pasquale declined to release details, but according to news reports, Mills was accused of failing to mention a 1995 phone call with Berlusconi in which the two discussed alleged illicit payments from Berlusconi to former Socialist prime minister Bettino Craxi.

Allegations

UK lawyer David Mills is accused of
receiving cash for lying in court

Mills also was accused of failing to tell a court that two offshore companies involved in buying US film rights were linked to Berlusconi.

The accusations surrounding Mills' testimony stem from a separate case in which Berlusconi, Mills and 12 others were accused of tax fraud and embezzlement over the purchase of US movie rights by Mediaset, Berlusconi's media empire. All the defendants deny wrongdoing.

Prosecutors have said they had rushed to complete the investigation and to try to bring the case to trial after Parliament passed a reform, backed by Berlusconi's government, which reduced the statute of limitations on the charges.

The conservative prime minister has repeatedly accused Milan prosecutors of waging a political vendetta against him following years of investigations and prosecution against him. He says they sympathise with the left.