Diego della Valle: Meet the Italian Ralph Lauren

Suddenly, last Saturday, Italy's election campaign resolved itself into a grudge match between two men.

Both are among the most famous and successful businessmen modern Italy has produced. In the right corner, il Presidente del Consiglio, to give him his orotund Italian label, Silvio Berlusconi: the richest man in the country, the media mogul who controls, directly or indirectly, 90 per cent of the output of Italian television and much else besides, and who has ruled the country for five years, far longer than anybody since the fall of Mussolini.

In the left corner - but not far left by any means - the man who could be his mirror, only 15 years or so younger: Diego della Valle, the founder of Tod's shoes, the Italian luxury goods maker which, year after year, bucks the trend that sees handmade luxury Italian goods businesses in dire trouble from cheap far eastern imports. He is the man The New Yorker called "the Italian Ralph Lauren".

Both have been dubbed "cavaliere di lavoro" for their achievements - a rough equivalent to being knighted; both have compact frames and extravagant personalities; both own football teams, Berlusconi AC Milan, della Valle Fiorentina - the team he has dragged up from the depths of despair in the past three years, thanks to his input of £5m. There is even a political link: in 1993, when Berlusconi took his sudden and surprising decision to go into politics, della Valle was one of his backers, in words and funds.

But he's a backer no more. If the two men were to find each other face-to-face on the street, although they are civilised Italians no-one would be very surprised, given the tenor of their recent exchanges, if they went for each other's throats.

Last Saturday, in the civilised city of Vicenza, corporate Italy sat down to mull the future. It was a congress held by Confindustria, the Italian equivalent of Britain's CBI, to thrash out the question of how on earth Italy is to become more competitive. Growth here has slowed to a stall under Berlusconi's leadership. When the media mogul took charge in 2001 he was supposed to wave his wand and make the rest of the country as miraculously prosperous as he was himself. Somehow it hasn't happened. The Economist calls Italy "the new sick man of Europe". At Vicenza, Italy's brightest and wealthiest sat down to work out how they are going to climb out of this hole.

Berlusconi wasn't invited - though his finance minister (and his tax accountant) Giulio Tremonti had been given a friendly hearing the day before. But then, suddenly, the Prime Minister was there in the hall, marching to the stage, while the audience was suddenly padded by dozens of what appeared to be his supporters.

Il Presidente took the mic, and spoke his mind. Refusing to abide by the three-minute time limit for speeches, he launched into a tirade. "Don't pay attention to the newspapers that talk about decline," he exorted his peers. "An entrepreneur has the duty of optimism...! Open your eyes, where is the crisis? Don't give credence to the papers that talk about decline...we are number one in Europe for the number of cell phones and cars people own, we've even increased the birth rate...!"

In the front row sat Diego della Valle, shaking his head in disbelief. Berlusconi fixed him with a steely gaze. "I see Signor della Valle shaking his head," he seethed. "If an entrepreneur goes out of his mind and supports the left, I believe he must have many skeletons in his closet and many things that must be pardoned. And so he puts himself under the protective cloak of the left and of the left wing judges..."

Della Valle, from his seat: "Shame, shame on you...!" The chorus of whistles from Berlusconi's supporters prevented him from saying more.

The following day della Valle reflected on Berlusconi's vicious and extraordinary performance. "I'm worried by the state in which I saw him," he said. "He is a man on the edge of a nervous breakdown. All those who love him should be sure to stay close to him. The aggressiveness that induced him to say such a huge quantity of rubbish worries me, bearing in mind that this is the man who is ruling the country. The family should stick close to him and make sure he rests..."

Despite their great wealth, Berlusconi and della Valle represent two very different ways to get rich in modern Italy. Berlusconi, son of a bank clerk, came up via the construction trade and then with the critical help of political patronage (and, it has often been asserted though never proved, Mafia finance) moved into television. Though he is a great and instinctive showman, it was not talent that gave him an irresistible lock on commercial television in Italy but the willingness of Socialist leader Bettino Craxi to ram through decree laws to sanctify his de facto monopoly.

Della Valle's route to success has been very different. The grandson of a cobbler, his is the classic north Italian story of a family firm founded on craft skills - a firm like hundreds of shoe-making firms in the town of Cassette d'Ete, in Le Marche province - which has clambered to a giddy height thanks to the flair of one man.

Della Valle's father Dorino had taken the little company far beyond the cobbler's shop and was already selling shoes to fancy foreign marks like Saks and Neiman Marcus when, in 1978, Diego made the decision to launch a mark of his own. He decided to call it JP Tod's, a name he found in the Chicago phone book.

America has been equally crucial to the success of both Berlusconi and della Valle, but it has meant very different things to the two men. Berlusconi made himself the fount through which all those wonderful things the Americans dreamed up - quiz shows and variety shows and American soaps and dramas - poured into Italian homes. The traffic was all one-way.

Della Valle fell quite as much under the spell of the US as Berlusconi did - when he visits New York today he still eats a Caesar salad and a burger at the same joints where he tasted them when he was a goggle-eyed 16-year-old on his first visit - but his achievement has been to sell America back to America, and then to the rest of the world, with an elegant Italian twist. Style, refined, conservative yet casual, is at the heart of his success.

That difference helps explain why everything della Valle touches has great style about it, while Berlusconi will always be the emperor of faff. Della Valle's new HQ has an undulating chrome staircase designed by Ron Arad, he has a store in Tokyo's Omotesando designed by Toyo Ito, and when he goes sailing it's in a mahogany yacht once owned by Jack Kennedy. In his sprawling villa in Sardinia, by contrast, Berlusconi has six or seven swimming pools and more marble and neo-Baroque twiddly bits than you can shake a stick at. He has an unshakeable affection for soppy Neapolitan songs and ugly jokes.

Perhaps Berlusconi sees those differences and they rile him; certainly he hasn't forgotten that della Valle once backed him and does so no longer. The shoe tycoon is best friends with Luca Cordero di Montezemolo - head of Fiat, former head of Ferrari - and heir to Italy's style king Gianni Agnelli. He may be a cobbler's grandson but he is as close as you can get to the heart of Italy's business establishment these days.

Berlusconi by contrast was a parvenu and will remain so till the day he dies. Behind the viciousness of his recent spats with della Valle - "If Signor della Valle wants to pick a fight with me he will come out of it with broken bones," he said recently on television - is the injured pride of a man who will never get the respect he craves, despite all his billions. "Povero Silvio," as they say in Rome, weeping crocodile tears into their aperitivo. Poor Silvio.

And there may be another emotion fuelling his antipathy - the fear that this wealthy, stylish, self-assured, brilliantly connected man could himself do a Berlusconi and come out some time soon as a formidable political opponent. Della Valle denies he has any such ambition: being a businessman and a politician, he says, "are two completely different things. Politics should be left to the real politicians." But should the unthinkable happen and Berlusconi wins the election on 9 and 10 April, it's not impossible that he could think again.

"I've seen at close quarters a man who has lost control of his nerves," he said following the clash in Vicenza. "He thinks Italy belongs to him, that he can do what he wants with it according to his own convenience, and he is arrogant and a bully. But what worries me most is people could fall for his programme of fantasies... It's a film already seen - and it has produced nothing."