Could a teenage girl topple Berlusconi?

She calls him 'daddy'. He bought her a £6,000 necklace for her 18th. Silvio Berlusconi's relationship with Noemi Letizia has already seen his wife file for divorce. Now, could it cost him his grip on power?

Italians are always scornful about the obsession of the "Anglo-Saxon" media with the private lives of the rich and famous, but for the past month the Italian newspapers have been preoccupied with one subject and one subject only: the relationship between Prime Minister Silvio Berlusconi and a young woman from Naples called Noemi Letizia.

Mr Berlusconi has been caught out telling numerous lies about the relationship and refuses to explain them. And with important elections pending, his popularity, at an all-time high only six weeks ago, may be eroding.

The media cannot be accused of muck-raking on the issue because it was Mr Berlusconi himself who drew attention to the relationship in Tuesday when he took advantage of a trip to Naples to drop in on Noemi's 18th birthday party. There he posed for photographs and presented the pretty young blonde with a gold and diamond pendant worth €6,500 (£5,700). This unremarkable event was immortalised in a short news story the next day in La Repubblica.

And there it would have ended, except that within four days it provided Mr Berlusconi's second wife, Veronica, with the casus belli for a divorce. Her husband, she said in a press release, was "consorting with minors"; he was "not well", she was worried about him, but in the meantime, after nearly 30 years together, she was in no doubt that the marriage was over.

Suddenly that innocuous-seeming social event assumed mysterious and sinister overtones. Noemi, it was learned, called Mr Berlusconi "papi", Italian for "daddy". He seemed on remarkably familiar terms with the girl. Pushed into a corner by Veronica, who opens her mouth about once every two years but with devastating effect, Berlusconi went on Porta-a-Porta, a late-night political chat show hosted by his most unctuous TV courtier and explained that Noemi's father Elio Letizia was an old political contact from his days when he was connected to Bettino Craxi and the Socialist party: Berlusconi needed to see him on urgent European election business. But soon afterwards Bobo Craxi, son of the late Bettino, popped up and said he had never heard of Noemi's father. Likewise Mr Berlusconi's unlikely claim about "election business" failed to pan out, and some weeks later was denied by Letizia himself.

The personal was personal no more: something about that birthday party, and Mr Berlusconi's presence at it, had tipped the long-suffering Veronica over the edge. One reason for her anger, as she explained in a bitter email to the Ansa news agency, was the fact that he had failed to turn up to the coming-of-age parties of any of the their own children, "even though he was invited". But that in itself could not be la goccia che ha fatto traboccare il vaso, (or as we would say, the straw that broke the camel's back). Could Berlusconi be the lover of Noemi, and thus perhaps guilty as Veronica suggested of "consorting with minors"? Or might she be his love child? Her plump cheeks and currant eyes, not that dissimilar to the Prime Minister's, allowed the world to guess at the latter possibility. But Mr Berlusconi flatly refused to shed any light on their relationship. He insisted that he had only met her "three or four times", and always in the company of her parents.

The irony is that never before has Berlusconi showed any coyness about exposing his colourful and chaotic private life to the public gaze. He fell in love with Veronica when she appeared topless in a play called The Magnificent Cuckold in Milan, and lived in sin with her for 10 years before marrying her in a civil ceremony; their children were born before the wedding. When he went into politics in 1994 his manifesto was a bowdlerised autobiography, Una Storia Italiana, depicting himself as the Italian everyman, the bank manager's son from nowhere who had grown immensely rich through hard work, a home-loving family man in touch with his common roots. Italians in their millions swallowed it, yet no-one doubted (you just had to look at his two wives) that he had an eye for the girls.

It was after his second and much more convincing election victory in 2001 that the rumours about Berlusconi's frenetic affairs began to circulate in earnest, with talk of a beautiful young intern being taken to his Sardinian villa for the summer as his "assistant" – and the rapid promotion of others who were similarly eye-catching through the ranks of his party, Forza Italia, by way of his commercial television channels. Berlusconi the ageing roué had found the perfect way to keep his libido engaged, despite the demands of politics. And this being Italy, nobody made a fuss. Veronica had been settled in a magnificent house a few kilometres from Berlusconi's main home, Villa Arcore, north of Milan. He was obviously a bad husband, but in Italy that was nobody's business but the family's.

Yet as the editor of La Repubblica, Ezio Mauro, pointed out yesterday: "Mr Berlusconi long ago destroyed the boundaries between the public and the private." He did it when he published his manifesto. And he continued to do it in a more chaotic, impulsive way when he allowed the paparazzi to snap him hanging out with busty showgirls 50 years his junior. It was the behaviour of a sultan, a monarch or a dictator, and the way Berlusconi was pushing the envelope was an indication of how he was steadily moving in that direction. His own newspapers and television channels would never cry foul. RAI, the national broadcaster, was increasingly under his thumb. Even the independent dailies were more and more reliant on his goodwill. Berlusconi's growing recklessness about his image became a barometer of his increasing sense of personal invulnerability.

But he was reckoning without Veronica. It was in January 2007 that she first told the world that he had gone too far, granting an interview to La Repubblica (one of the few really independent dailies), in which she demanded that he apologise for saying of Mara Carfagna, a glamour model turned MP (and now a cabinet minister), "I would marry her like a shot if I wasn't married already." Meekly Berlusconi consented. But he didn't reform. He carried on just as before, until Noemi's 18th birthday rolled around and it all went horribly wrong.

Today Italy is at an impasse: La Repubblica has insistently demanded that Berlusconi come clean about Noemi, for the last two weeks publishing a list of 10 questions it wants him to answer. Berlusconi has repeatedly refused. With European elections just 10 days away, there is a real risk that his silence will injure him in polls he was expected to win with ease – particularly now that respected figures in the Catholic church like the former Archbishop of Pisa Alessandor Plotti have begun to attack him. Berlusconi has said he may make a statement to parliament in response to what he calls the "vile reports" about his relationship with Noemi.

It is symptomatic of the trivialisation of Italian politics under Berlusconi that he is now being held to account, not for corruption, or mafia connections, but because of his relationship with a teenage girl. But the fight itself is not trivial. Living in Italy now is like being trapped in a field of lava slowly but irreversibly sliding down a mountainside. Far from leading to a revitalised "Second Republic", Italy's bribery scandals of the 1990s instead ushered in the Age of Silvio and the slow, steady degradation of the nation's democratic institutions. If the Prime Minister can get away with carrying on an adulterous, semi-public love affair with a teenage girl (and then lying so brazenly about it that any fool can see he is not telling the truth) and still he is not brought to account – then the nation is in danger.