BBC News' David Willey reports on the acquittal

"Obviously I'm delighted," Mr Andreotti said after hearing the verdict. "It wasn't so great to have to wait so many years. I consider the case closed now."

After a trial lasting four years, the judges found that the prosecution had failed to prove its case that Mr Andreotti, seven times Italian prime minister and a senator-for-life, had had personal contact with Mafia bosses.

The acquittal was widely expected following a not-guilty decision in a separate murder trial in Perugia last month.

The verdict was carried live on Italian television. Mr Andreotti did not attend the Palermo court to hear the verdict, preferring instead to stay in Rome.

The BBC's Rome correspondent, David Willey, says this was the most important political trial in the history of Italy's post-war republic.

Mr Andreotti served in practically every Christian Democrat Italian government between the end of World War II and his retirement from active politics in 1992.

Accusations

He was accused of being the Mafia's political godfather in Rome, exchanging votes in Sicily in return for near impunity for the Mafia's criminal activities.

Evidence against him had come mainly from Mafia turncoats.

Toto Riina: In prison since 1993

One accusation alleged that Mr Andreotti exchanged a "kiss of honour" with Sicily's boss of bosses, Salvatore 'Toto' Riina, in a secret meeting in the 1980s.

A conviction could have carried a 15-year jail sentence for the 80-year-old politician.

This acquittal may not mark the end of Mr Andreotti's legal ordeal, however, as the prosecution is expected to appeal.

But Mr Andreotti's lawyers say they are happy with the verdict and consider him entirely vindicated.

His main lawyer, Franco Coppi, told reporters: "I have to categorically state that there is no fuzzy area about this sentence for us. It would be arbitrary to interpret it as leaving any doubt."

The Vatican was also pleased at the verdict. Mr Andreotti is a devout Roman Catholic who goes to mass every morning and has been the confidant of five popes.

Chief spokesman Joaquin Navarro-Valls said: "I repeat the satisfaction of the Holy See expressed when Senator Andreotti was acquitted in the Perugia trial a month ago."

'False evidence'

Mr Andreotti had always said that he was framed by Mafia mobsters who wanted revenge for his government's crackdowns on organised crime.

"Certainly the so-called proof from the turncoats was not enough for a conviction," Mr Coppi told reporters.

"Obviously, if they had believed in the kiss (of honour) ... the outcome would have been different."

Prosecutors had devoted much of their arguments in the closing days of the trial to defending the credibility of their star witness.

Doubts about Baldassare Di Maggio had grown after he admitted this month to killing a man while under state protection.

Last month Mr Andreotti was acquitted in another long drawn-out trial in which he was accused of complicity in the murder of a journalist killed by the Mafia 20 years ago.