Italy PM quizzed by Milan judges

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Milan (Reuter) - Silvio Berlusconi was questioned for several hours in a graft investigation by Milan's "Clean Hands" magistrates yesterday as his government staggered ever closer to collapse.

The Prime Minister, who denies wrongdoing and says he will not resign, is suspected by magistrates of knowing about bribes paid by his Fininvest media group to tax police before he was elected to Parliament in March.

Mr Berlusconi, the first Italian prime minister to face a criminal investigation while in office, was questioned at the Palace of Justice by Milan's chief prosecutor, Francesco Saverio Borrelli.

Afterwards, he repeated that he would not resign. He said the investigation "is based, incredibly, on a theory devoid of any firm evidence".

The meeting with the magistrates came as Mr Berlusconi's five-party coalition was rocked by a warning from one of its key members that it had only weeks to live. The Northern League leader, Umberto Bossi, said the government, installed in May, would fal l once Parliament approved the 1995 budget.

In a sign that the reckoning was fast approaching, at least five opposition parties withdrew most of their amendments to the budget bill.

Giuseppe Tatarella, a deputy prime minister who belongs to the hard right National Alliance, said a full review of the coalition, long demanded by the League, would take place "as soon as possible and . . . there will be a crisis"

The entire team of Justice Ministry inspectors resigned yesterday after several important magistrates questioned whether reviews of their offices were politically motivated.

Last week the top anti-corruption prosecutor, Antonio Di Pietro, resigned, saying he did not want to be "used" for political purposes.