A convicted mob hit man testified Friday that he was told Italian Premier Silvio Berlusconi made a deal with the Mafia in the 1990s, offering unspecified benefits in exchange for political support.
Berlusconi has denied the allegations, which have set off the latest storm to rattle the scandal-plagued premier.
Gaspare Spatuzza testified as a prosecution witness in the appeals trial of Sen. Marcello Dell'Utri, a close political associate of Berlusconi who was convicted in 2004 of ties with the Sicilian Mafia and sentenced to nine years in prison. Berlusconi is not formally involved in the trial.
Spatuzza, who is serving a life sentence for several murders, told the court that in 1993 he was told by his boss, Giuseppe Graviano, that the mob had made a deal with Berlusconi that would provide "benefits" to the Mafia in exchange for the mob's support in elections.
The media mogul entered politics a few months later and won his first term as premier in 1994 elections.
Headline-grabbing reports of Spatuzza's claims have been swirling for days, and most of his two-hour testimony was carried live by Italy's Sky TV. The attention and credibility given to the statements prompted prosecutors last week to clarify that they were not investigating the premier.
Berlusconi and Dell'Utri have both branded the allegations ridiculous and denied any links to the Mafia.
Spatuzza addressed the court from behind a white hospital screen set up to conceal him, and surrounded by uniformed and plainclothes police officers. The hearing took place in the northern city of Turin in a high-security courtroom.
Spatuzza was one of the mobsters who took part in a 1993 terror campaign ordered by Graviano, a top Mafia boss in Palermo, which included deadly bombings in Rome, Milan and Florence.
Graviano was arrested in 1994 and convicted of the attacks. Spatuzza was arrested in 1997.
In meetings to plan the 1993 bombings, Graviano confided to Spatuzza that "there is something going on that will give us all benefits, starting with those who are in jail," the turncoat told judges on Friday.
At a later meeting, in a cafe on Rome's posh Via Veneto, Graviano purportedly told Spatuzza that he had made a deal with Berlusconi, with Dell'Utri acting as a go-between.
"Graviano told me we had obtained all that we wanted thanks to the seriousness of these people" Spatuzza said. "They practically put the country in our hands."
Spatuzza said the boss confirmed to him that the Berlusconi he was talking about was "the one from Canale 5" _ a reference to one of the TV channels that is part of the media magnate's empire.
Answering questions from prosecutors, Spatuzza said he did not have other details on the purported agreement.
Dell'Utri told reporters after the hearing that the testimony was a political ploy to attack Berlusconi's government.
"I don't know these people," he said referring to Spatuzza and Graviano. "These things are absurd."
Dell'Utri, a longtime executive in Berlusconi's business empire, was an architect of his political rise and is now a senator as the conservative leader serves his third term as premier.
Berlusconi has dismissed Spatuzza's claims as "unbelievable" saying that he is the person "who is farthest away from the Mafia in terms of character, sensibility, mentality, education, culture and political commitment."
His spokesman, Paolo Bonaiuti, said in a statement Friday that Spatuzza was not a real turncoat but was being controlled by the Mafia to undermine the government's efforts to fight crime.
Recalling recent arrests of top mobsters, Bonaiuti said that "it is logical for the Mafia to use its people to make statements against the premier and a government that acts so determinately and concretely against organized crime."
Prosecutors in Florence, who are probing the 1993 bombings, have denied reports they had placed Berlusconi and Dell'Utri under investigation over Spatuzza's statements.
Berlusconi already faces charges of tax fraud and corruption in separate, unrelated trials in Milan. He denies wrongdoing in both cases.