Montenegro's President, Milo Djukanovic, is reported to be under investigation in Italy for alleged involvement in cigarette smuggling.

Prosecutors in the Italian port of Bari, which lies across the Adriatic Sea from Montenegro, are investigating whether Mr Djukanovic has links with the local mafia which imports contraband cigarettes into Italy.

The reports originated in the Italian newspaper La Repubblica, which said some of the president's former associates were also being investigated.

The French news agency, AFP, said the investigation was opened after a key witness involved in the smuggling ring came forward and provided information on Mr Djukanovic.

Cigarette smuggling is a serious problem for Italy, with $2 billion to $3 billion in potential tax revenue being lost every year, according to treasury officials.

Montenegro is considered a key part of the tobacco smuggling route from Yugoslavia to Italy, with ships carrying contraband cargo across the Adriatic for distribution throughout Europe.

La Repubblica said investigators had been told the Mr Djukanovic would not be protected by diplomatic immunity as Montenegro did not have diplomatic representation abroad.