Berlusconi and Mills to face trial

The former Italian prime minister Silvio Berlusconi was ordered today to stand trial following an investigation into alleged fraud in the purchase of movie and television rights at Mediaset, his media empire.

David Mills, the estranged husband of the culture secretary, Tessa Jowell, will also have to stand trial for his part in the alleged fraud, the Apcom news agency said.

Mr Mills tonight said that he was "absolutely baffled" by today's decision as he had understood that he had been cleared by the trial judge, Fabio Paparella.

"I am absolutely convinced of my own innocence and always have been," he told Sky News. "I think everybody understands that this business in Italy has very strong political overtones. I have given evidence as a prosecution witness and am now apparently to be charged. Something like this could never happen in the UK and we will just have to deal with it."

Mr Mills is alleged to have set up offshore firms that helped Mr Berlusconi's media company avoid tax liability on TV rights. Mr Mills has been ordered to stand trial on charges of false accounting, embezzlement and tax fraud.

Today's ruling follows a three-year investigation by Milan-based prosecutors Fabio De Pasquale and Alfredo Robledo. Mr Mills has been a close friend of Mr Berlusconi for many years and in the 90s set up a network of offshore companies for him.

It is alleged that, through these companies, American TV rights were bought at inflated prices and more than £40m in tax was evaded as a result.

Asked on Channel 4 News what impact this would have on Ms Jowell, Mr Mills said: "I am living a separate life. I am dealing with this on my own. I know I am innocent. I have an excellent legal team in Italy."

Judge Paparella said Mr Berlusconi will also face charges of false accounting, embezzlement and tax fraud at the trial, which is expected to take place in the autumn, the MF-Dow Jones news agency reported.

"The decision was predictable, typical of the sort of decision we have grown accustomed to from this court," Mr Berlusconi's lawyer Nicolo Ghedini said after the ruling.

He was quoted as saying after a preliminary hearing that the court "systematically" did not allow the defence to provide evidence. Therefore, the defence was not able to "present witnesses that would have explained that Berlusconi had nothing to do with the events in question".

The chairman of Mediaset, Fedele Confalonieri, will also appear in the dock, Apcom news reported.

In all, 14 people were being investigated for charges including tax fraud and embezzlement over the purchase of US movie rights by Mediaset. All have denied wrongdoing.

Earlier this year, in another case, prosecutors in Milan asked for Mr Mills to be put on trial with Mr Berlusconi, who they claim bribed the British lawyer to withhold evidence from the Italian courts in the 90s.

That case revolves around a $600,000 (£325,000) payment made from the Bahamas to an account managed by Mr Mills in Switzerland. In April, in the build-up to the Italian general election, Mr Berlusconi waved 15 documents that he said proved that the money came not from him but from a Neapolitan shipowner, Diego Attanasio.

He said his lawyers had asked prosecutors to look into the new evidence, but they had refused. Their decision to press for his indictment and that of Mr Mills, knowing the documents existed, represented "a very serious instance of the indisputable use of the law for political ends", he said.

The $600,000 payment was made by an offshore trust of which Mr Attanasio was the beneficiary. But the shipowner has denied knowledge of the payment and told prosecutors he gave power of attorney over the trust's accounts to Mr Mills.

During a two-week media frenzy earlier this year, the alleged financial peculiarities rocked both Mr Mills and Ms Jowell, and contributed to the couple's separation over "a breakdown of trust" after 27 years of marriage.

Ms Jowell's knowledge of her husband's troubled business affairs came under intense scrutiny from the parliamentary standards commissioner, Sir Philip Mawer. She was cleared by Sir Philip of failing to register her husband's profit from shares in the parliamentary register. The prime minister, Tony Blair, accepted Ms Jowell's assurance that she was not told for four years by her husband that he had received the $600,000 gift with which he had paid off a joint mortgage on their home.

Mr Berlusconi could face four to 12 years in jail if convicted of money laundering and up to six years for tax fraud.

But the media tycoon has managed to avoid jail in at least seven previous graft trials. He was found guilty four times, but verdicts were overturned on appeal or the statute of limitations applied and charges were dropped.

The decision to call the trial follows Mr Berlusconi's narrow defeat in April's general elections, which saw Italy's longest-serving postwar prime minister ousted from power in what he angrily claimed was a fraudulent result.