Berlusconi verdict due

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The London High Court is expected this week to decide whether to snub the Home Secretary by refusing to agree to the release of secret documents that reveal a secret offshore empire set up by former Italian prime minister Silvio Berlusconi.

The papers were seized in a raid by the Serious Fraud Office, accompanied by Italian police, on a Regent Street office in April.

Italian magistrates allege that the offshore network played a key role in slush funds used for bribery and corruption.

The Italian media mogul denies the charges, and his lawyers argued in the High Court at the beginning of October that the search warrants were illegal and that Home Secretary Michael Howard had exceeded his powers in allowing the raid.

Mr Berlusconi is due to stand trial on charges of false accounting in Milan on 21 November, and the papers are intended to form a key part of the case. "The SFO obviously wishes to see the documents made available to the Italian authorities at the earliest opportunity," an SFO spokesman said.

As revealed by the Independent on Sunday in July, a leading London lawyer, David Mills, helped establish the network for Mr Berlusconi.

Mr Mills has some powerful connections: he is the brother-in-law of Barbara Mills, the director of public prosecutions, and husband of Labour MP Tessa Jowell, a close ally of Tony Blair.

He held positions in several London-based companies, which were used to buy film rights from Berlusconi firms based in offshore tax havens. These were then sold on to Mediaset, Mr Berlusconi's Italian media empire, at what investigators suspect were inflated prices. There is no suggestion that Mr Mills was involved in any of the alleged corrupt activities.

The Italians' main focus is on a Jersey firm, All Iberian, which they allege paid a L10bn (pounds 4.2m) bribe to disgraced former Italian premier Bettino Craxi. All Iberian was registered at the Jersey office of Edsaco, the firm raided by the SFO, of which Mr Mills was a non-executive director.

Bank details requisitioned from the Banca Commerciale Italiana in London are also among the papers held by the SFO. It is also understood that the police's National Crime Intelligence Service has provided details of payments made through London branches of Barclays and Midland banks.