Putin accused of giving Berlusconi cut from energy deals

The Russian Prime Minister Vladimir Putin bought the political compliance of Silvio Berlusconi by allowing the Italian Prime Minister a cut from major energy deals, America's ambassador to Rome has suggested, in the most startling WikiLeaks documents to emerge yet.

Mr Putin's hold over Mr Berlusconi is the focus of US diplomats' concern in a series of dispatches in which they suggest the Italian leader's eagerness to please the Russian Prime Minister may become a threat to political and economic stability in the region.

The allegations by the former US ambassador Ronald Spogli were revealed little more than a day after the US Secretary of State Hillary Clinton attempted to heal the diplomatic wounds caused by earlier leaked papers in which American diplomats described the Italian premier as "politically weak", "vain" and "feckless".

The latest leaks show how Mr Spogli, who served in Rome until 2009, regarded Mr Berlusconi as a stooge of Mr Putin, and making up Italian-Russian foreign policy on the hoof while disregarding all advice from colleagues.

But it is the accusations of personal profiteering that are the most serious. A report dated 26 January 2009 quotes US embassy sources within the Italian Prime Minister's People of Freedom (PDL) Party as believing "that Berlusconi and his cronies are profiting personally and handsomely from many of the energy deals between Italy and Russia".

And it adds: "The Georgian ambassador in Rome has told us that the [government of Georgia] believes Putin has promised Berlusconi a percentage of profits from any pipelines developed by Gazprom in co-ordination with ENI."

The Italian government has a large stake in ENI, the huge energy firm, which works closely with Russian state-controlled energy giant Gazprom, a major exporter of gas to Europe.

Mr Berlusconi denied the accusations yesterday. "It is quite clear that I have absolutely no interest in any other country; that there are absolutely no personal interests, and that I only look after the interests of the Italians and my country," he told the Ansa news agency.

But Dario Franceschini, chief whip for the opposition Democratic Party, called on the Prime Minister to make a statement to the House. "We hope that those claims are not true. In any event, the Prime Minister should come to parliament to deny them," he said.

The latest WikiLeaks documents also reveal US diplomats' exasperation over Mr Berlusconi's attitude to policy on Russia. "Berlusconi treats Russia policy as he does his domestic political affairs – tactically and day-to-day," said one dispatch.

"His overwhelming desire is to remain in Putin's good graces, and he has frequently voiced opinions that have been passed to him by Putin. One such example: in the aftermath of the Georgia crisis, Berlusconi continues to insist that Georgia was the aggressor and that the Georgian government was responsible for several hundred civilian deaths in South Ossetia."

Another report noted how senior colleagues are "reluctant to confront the PM even when he is at his worst on Russia". The report said that even the Foreign Minister, Franco Frattini, "received his marching orders from the Prime Minister" regarding Russian affairs. Papers from 2008 leaked earlier this week show US diplomats warning that "the close relationship between the Italian government and Russia could soon become a point of friction in relations between the US and Italy."

James Walston, professor of politics at the American University in Rome, said the US was not the only country concerned. "I bet if we saw the WikiLeaks from European embassies in Rome they'd be even more distressed than the Americans. There are real concerns that Europe will come to rely too much on Russian gas. The fear is that Berlusconi is giving Putin rope with which he might hang Europe."

He added that the "writing was on the wall" when Mr Berlusconi made a visit to Mr Putin's country home in October 2009, accompanied only by his shadowy Russian-speaking go-between Valentino Valentini. "There were no ministers, no civil servants present. No records of what was said – or what personal deals were cut," he said. "That should have set alarm bells ringing."

The latest revelations will rachet up the pressure ever further on a wounded Prime Minister who faces a make-or-break confidence vote in parliament on 14 December after centre-right allies broke away from his PDL Party following months of sleaze and corruption allegations.