Berlusconi ally quits over apartment allegations

A fresh corruption scandal cast a shadow on Silvio Berlusconi's government yesterday when a cabinet minister quit after an investigation into the purchase of his luxury apartment in Rome.

Prosecutors claim that economic development minister Claudio Scajola, one of the prime minister's closest allies, paid far below the market rate for the nine-room property overlooking the Colosseum. To make up the difference, they say an extra €900,000 (£775,000) was stumped up by a Rome businessman who has already been arrested as part of a wider investigation into crooked public contracts.

Mr Scajola, 62, said he was unaware that more than half the cost of the apartment was met by a series of 80 cheques sent by the businessman, Diego Anemone, to the sisters from whom Mr Scajola bought the property in 2004.

"As a minister, I could not live in a house paid in part by others," Mr Scajola told a press conference yesterday. "I have been suffering greatly for the past ten days, being in the centre of a media campaign without precedent, in a judicial inquiry in which I'm not under investigation." He said he had quit to defend himself. "And in order to defend myself I cannot continue to be a minister as I have for the past two years, giving my all."

Opposition leader Pier Luigi Bersani of the Democratic Party said, however, that Mr Scajola had made the "right choice" in stepping down, because his explanation "has never been convincing". Federico Centrone, the Perugia prosecutor, yesterday confirmed that Mr Scajola was not himself under investigation. The minister's name originally surfaced in a probe by magistrates in the central city of Perugia into irregularities in public works contracts to build the original site of last year's G8 summit in Sardinia.

That investigation led to the arrest of Mr Anemone and three other people, including the former head of the state public works office, Angelo Balducci, in February this year.

An investigators' report prepared for a Perugia court suggests that Mr Anemone arranged for €900,000 in cash to be converted into 80 cheques, which were handed over to Beatrice and Barbara Papa to cover the difference between the asking price and the €600,000 paid by Mr Scajola.

Lawyers for Mr Anemone have categorically denied any involvement on his part, saying the press reports were "totally made up" and without "a shred of proof". Political pundits yesterday saw Mr Scajola's resignation as another blow to the stability of Mr Berlusconi's coalition government, which has been dogged by infighting in the past few months. There was no immediate reaction to Mr Scajola's resignation from Mr Berlusconi, who only last week had urged the minister to stay on. Mr Scajola had been an important driver behind Italy's revival of nuclear energy.

However, by yesterday morning it appeared that the writing was on the wall for him, when the Berlusconi family newspaper, Il Giornale, joined the chorus of media and opposition politicians calling on him to resolve the controversy or quit. Mr Scajola is no stranger to unflattering headlines.

He was forced to resign as interior minister in a previous Berlusconi government in 2002, when he described as "a pain the ass" a government adviser killed by the Marxist militant group, the Red Brigades. The murdered man, Marco Biagi, was slain after being denied a police escort by Mr Scajola.