In a two-part judgement, the 68-year-old Berlusconi was cleared of bribery in blocking the sale of the SME food group to a rival in 1985, and given the statute of limitations on the charges of keeping a judge on his payroll, which date from 1991.

Prosecutors had demanded the court impose the maximum eight-year jail sentence for bribing judges to block a 1985 sale of state-owned food company SME to his rival Carlo De Benedetti, boss of Italian food giant Buitoni.

Berlusconi’s lawyer Gaetano Pecorella said he would appeal the statute of limitations ruling because it did not fully clear his client. The verdict had left Berlusconi lingering “at the doors of justice”, Mr Pecorella said.

The statute of limitations — meaning the prescribed period of time in which the case could be brought had run out — was applied because the court decided to halve the period of the original statute of limitations from 15 years. The 1991 date thus fell outside the ambit of the case.

The verdict provides Mr Berlusconi with a timely political boost, leaving him free to turn a political rally of his Forza Italia party in Venice this weekend into a massive victory party.

A rival rally of the centre-left opposition coalition in Milan, marking former EU Commission president Romano Prodi’s return to the political fray, is likely to be subdued by comparison.

“It’s a verdict which gives justice to Silvio Berlusconi. I hope it will help bring about a calmer and less confrontational climate between politics and the judiciary,” said Deputy Prime Minister Marco Follini, a member of the Christian Democract UDC party in Berlusconi’s centre-right coalition.

Several of Berlusconi’s co-accused, including his close confidant Cesare Previti and prominent judge Renato Squillante, received lengthy jail sentences in a separate trial last year, but have appealed.

The trials were split so as not to interfere with Mr Berlusconi’s commitments as prime minister.

Although Mr Berlusconi, a media magnate after years of successful deals in the business, has faced a string of trials focusing on his dealings, in most cases he has escaped conviction, either by being acquitted or having his convictions overturned on appeal.

He previously profited from the statute of limitations in another judge-bribing case involving his purchase of Italian publishing house Mondadori, against after a bitter battle with his business rival Carlo De Benedetti.

Confidant Previti was found guilty in 1995 of bribing a judge to ease the buy-out by Mr Berlusconi’s Fininvest, and given an 11-year jail sentence which he is appealing.

Charges against Mr Berlusconi in the same case were quashed by the Supreme Court because time had run out to try him.