Prodi questioned on business fees

ROMANO PRODI, the man appointed to clean up the image of the sleaze- tainted European Commission, is being investigated by the authorities in Italy just two weeks before a crucial European Parliament confirmation hearing.

Mr Prodi's spokesman, Ricardo Franco Levi, confirmed that prosecutors in his home town of Bologna have opened a preliminary inquiry into allegations that the consulting firm he co-owns with his wife may have failed to declare some pounds 1.4m in fees earned in the early 1990s when Mr Prodi was in public office. But he denied that the investigation was a criminal one or that Mr Prodi had done nothing wrong.

"Prodi spoke about this earlier in the week and said, as I'm saying now, that there is absolutely nothing new in any of this." Mr Levi said. "This is a preliminary investigation and implies no wrongdoing. Under Italian law, as you know, when allegations of this kind are published in the press they have to be investigated. Prodi is quite calm about the investigation. This is an old, old story."

Mr Prodi was appointed earlier this year after the former Commission president Jacques Santer and his team was forced to resign for failing to root out sleaze and corruption in Brussels.

The latest disclosures may amount to nothing but they are potentially damaging, coming just ahead of the long-awaited interrogation of the new Commission by the executive's harshest critics in the European Parliament.

It is being alleged that the former Italian prime minister, who was formerly chairman of the state industrial holding IRI, failed to report his ownership of the private consulting group Analisi e Studi Economici during that time.