Berlusconi throws down gauntlet with 'dictatorial' decree

Showdown over media ownership as Prime Minister rejects President Ciampi's decision to veto bill that would benefit his empire tighten on media ownership

Silvio Berlusconi, the Italian Prime Minister, defied Italy's head of state yesterday, declaring his intention to ram through a "decree" after President Carlo Azeglio Ciampi dealt Mr Berlusconi a stunning, unexpected blow by refusing to sign a controversial new bill.

The media bill Mr Ciampi rejected had been tailor-made to enrich the Prime Minister's television companies and tighten even further his grip on Italy's media, according to Mr Berlusconi's critics.

Mr Ciampi's veto struck at the heart of both Mr Berlusconi's legislative programme and his business interests. President Ciampi belongs to the opposition camp, but this is the first time in four-and-a-half years that he has exercised his veto on grounds other than budgetary ones. No one had expected he would be so bold.

The most immediate consequence of the presidential veto is that 15 days from now - just eight working days - Mr Berlusconi's Mediaset company will lose one of its three terrestrial television stations, Rete 4. Earlier this year, the Constitutional Court ruled that Rete 4 must switch to satellite, as a way of diluting Mr Berlusconi's domination of Italy's television market. His direct control of Mediaset, and indirect control of the state broadcaster RAI, give him a grip on 95 per cent of Italy's television output.

Among other things, Berlusconi's new media bill was designed to stop Rete 4 going to satellite. But with the bill stalled, one signature away from becoming law, the Constitutional Court's decision will automatically come into force at midnight on 31 December unless he executes a decree.

"A decree is possible to save Rete 4," he told a press conference in Strasbourg yesterday.

Many of Italy's most important reforms are forced through by decree. But it will require the co-operation of the coalition members, the biggest of which, the post-Fascist National Alliance and Umberto Bossi's Northern League, are already in dispute with Mr Berlusconi and demanding that he give priority to pushing through their own favoured laws next year.

The centre-left opposition was quick to attack the proposal. The former Prime Minister, Massimo D'Alema, said: "I honestly don't see how it would be possible to sustain the constitutionality of a provision which was ... a violation of a ruling of the Constitutional Court."

Pointing out that many media concerns other than Mediaset will also be affected by the rejection of the media bill, opposition MP Giuseppe Giulietti said: "I believe it would be an improper operation ... I believe that in the coming hours Berlusconi will be concerned only with Rete 4."

The Berlusconi media bill, now in limbo, was intended, its supporters claim, to galvanise Italy's sluggish media sector. By treating print and electronic media as a single category, and permitting any one owner up to 20 per cent of the total media market, it was meant to allow media companies to become strong enough to stand up to foreign competition.

Mediaset, the Berlusconi-owned firm with three terrestrial channels, said the change in the rules would give it access to an extra €750m (£525m) in revenue. The bill also allows for the partial privatisation of state broadcaster RAI.

But the bill's critics maintain that it was designed to increase the size and strength of Mr Berlusconi's own media empire. Italian television is a duopoly of RAI and Mediaset. The latter would emerge from the reforms much stronger; and from 2009 Mr Berlusconi would be able to buy another newspaper, increasing his power in the print sector, too.