* Former premier convicted over Mediaset TV rights
* Will not serve jail time pending appeal
* Previous amnesty would make maximum jail time one year
* Political ally says Berlusconi "persecuted"
(Adds Berlusconi comments, effect of amnesty)
MILAN, Oct 26 (Reuters) - Former Italian Prime Minister
Silvio Berlusconi was sentenced to four years in jail on Friday
for tax fraud in connection with the purchase of broadcasting
rights by his Mediaset television company.
The 76-year-old billionaire media magnate, who was convicted
three times during the 1990s in the first degree before being
cleared by higher courts, has the right to appeal the ruling two
more times before the sentence becomes definitive.
That process is likely to be lengthy and he will not be
jailed unless he loses the final appeal. Even then, because the
crime was committed when an amnesty to prevent prison
overcrowding was in place, the maximum possible jail time would
be one year.
The ruling comes two days after Berlusconi confirmed he
would not run in next year's elections as the leader of his
People of Freedom (PDL) party, ending almost 19 years as the
dominant politician of the centre-right.
Milan judge Edoardo d'Avossa told a packed court that
between 2000 and 2003, there had been "a very significant amount
of tax evasion" and "an incredible mechanism of fraud" in place
around the buying and selling of broadcast rights.
The court's written ruling said Berlusconi showed a "natural
capacity for crime".
During a phone call to an evening news broadcast on one of
his own channels, Berlusconi said there was no link between his
decision pull out of politics and the Friday ruling, and slammed
the court for being politically motivated.
He called the verdict "political and intolerable," and said
it showed Italy had become uncivilised, barbaric and was no
longer a democracy.
Berlusconi lawyers Piero Longo and Niccolo Ghedini said the
the ruling was "totally divorced from all judicial logic",
adding that they hoped the "atmosphere" at the appeals courts
would be different.
Berlusconi, one of Italy's richest men, became prime
minister for a second time in 2001 after winning a landslide
election victory. Even while he was prime minister, he remained
in effective charge of Mediaset even though he had handed over
control of day-to-day operations, the court said.
The four-time prime minister and other Mediaset executives
stood accused of inflating the price paid for TV rights via
offshore companies controlled by Berlusconi and skimming off
part of the money to create illegal slush funds.
The investigation focused on television and cinema rights
that Berlusconi's holding company Fininvest bought via offshore
companies from Hollywood studios.
The court also ordered damages provisionally set at 10
million euros ($13 million) to be paid by Berlusconi and his
co-defendants to tax authorities.
"POLITICAL HOMICIDE"
The flamboyant Berlusconi, who is still on trial in a
separate prostitution case, resigned as prime minister a year
ago as Italy faced a Greek-style debt crisis, handing the reins
of government to economics professor Mario Monti.
Angelino Alfano, secretary of the PDL, said the ruling
proved once again "judicial persecution" of the media magnate,
while political rival Antonio Di Pietro, a former magistrate,
hailed the decision, saying "the truth has been exposed".
Should the ruling be confirmed on appeal, Berlusconi would
also be forbidden from holding public office for five years, and
from being a company executive for three years.
"This is not a sentence, but an attempt at political
homicide," Fabrizio Chicchito, the PDL's chief whip in the
Chamber of Deputies, said referring to the ban on holding
office.
Now that Berlusconi has said he will pull out of politics,
he may be focusing more on his business empire, which includes
Mediaset, AC Milan soccer club, and Internet bank Mediolanum.
Shares in Mediaset, Italy's biggest private broadcaster,
fell as much as 3 percent after the ruling, and are down about
50 percent in the last year.
The broadcaster has been struggling against rivals like News
Corp's broadcaster Sky Italia and a host of online
media, while its core advertising revenues are feeling the pinch
of the recession.
The court acquitted Mediaset chairman and long-term
Berlusconi friend Fedele Confalonieri, for whom prosecutors had
sought a sentence of three years and four months.
Berlusconi has owned AC Milan since 1986 and the club have
been European champions five times under his leadership. But the
its fortunes have dipped in the past couple of seasons amid cost
cutting, prompting repeated rumours of its possible sale.
He also is still on trial in the separate "Rubygate" case in
which he is accused of paying for sex with a teenaged nightclub
dancer when she was under 18 and thus too young to be paid
legally as a prostitute. He denies the charges.
($1 = 0.7716 euros)
(Additional reporting by Ilaria Polleschi, Danilo Masoni.
Writing by Lisa Jucca and Steve Scherer; Editing by James
Mackenzie and Michael Roddy)
