Mr Berlusconi is the first serving Italian PM to appear at his own trial

Mr Berlusconi, a billionaire businessman, is accused of bribing judges in an attempt to gain control of the state-owned SME food company.

He denies the charges, saying he is the target of a politically motivated witch hunt by Milan judges.

I had no direct interest and Craxi begged me to intervene Silvio Berlusconi

He told a packed courtroom in an hour-long speech that the then Prime Minister, Bettino Craxi, had asked him to bid for SME because a previously agreed sale price was too low.

"I had no direct interest and Craxi begged me to intervene, because he believed the operation damaged the state," Mr Berlusconi said.

Immunity call

Mr Berlusconi is the first serving Italian prime minister to appear at his own trial.

Monday's hearing came six days after his friend and former personal lawyer, Cesare Previti, was sentenced to 11 years' imprisonment for bribing judges in two takeover battles.

THE SME SAGA April 1985: Agreement on sale of SME to Carlo De Benedetti PM Bettino Craxi orders deal to be scrapped Berlusconi and others make higher offer De Benedetti asks court to reinstate original deal July 1986: Court rules against De Benedetti 1993/4: SME is finally broken up and sold 1995: Berlusconi et al charged with bribing judges in 1986

A verdict is expected in the summer, which could embarrass Mr Berlusconi as Italy takes over the presidency of the European Union.

On Sunday a leading member of Mr Berlusconi's party, Senate president Marcello Pera, called for the trial to be suspended until the prime minister leaves office, and for new immunity laws to be introduced.

Mr Berlusconi is currently planning to push through parliament new legislation providing politicians with immunity from prosecution.

Prodi's deal

One of the charges Previti was convicted on last week involved bribing judges to favour Mr Berlusconi during a takeover battle for the Mondadori publishing house.

I'm speaking not only as the accused in this case, but as citizen Berlusconi Silvio Berlusconi

Mr Berlusconi faced charges in the Mondadori case, but was acquitted under Italy's statute of limitations in 2000.

Previti is also a co-defendant, with Mr Berlusconi, in the SME case.

"I stand before the court with an untarnished reputation," Mr Berlusconi said.

"I'm speaking not only as the accused in this case, but as citizen Berlusconi, to whom the majority of Italians have entrusted the responsibility and the honour of governing the country."

SME was put up for sale by the state holding company IRI, which was run at the time by Romano Prodi, who went on to become Italian prime minister, and is now president of the European Commission.

Mr Berlusconi said Mr Prodi had secretly negotiated the sale to the owner of Buitoni, Carlo De Benedetti, for a low price, a deal he described as "outrageous".

Bribesville

Italian politicians enjoyed immunity from prosecution until 1993, when it was lifted during the Bribesville scandal that uncovered widespread corruption within government.

Bettino Craxi was one of those whose reputation was ruined, and he died as a fugitive from Italian justice in 2000.

Mr Berlusconi was convicted on corruption charges in a previous trial, but was later acquitted on appeal.

He has threatened to call snap elections if convicted in this case.