Judges in Milan will press charges against Tessa Jowell's husband, David Mills, and the Italian Prime Minister, Silvio Berlusconi, in connection with a $600,000 (£300,000) bribery scandal.
Just as Whitehall sources predicted the Culture Secretary would be cleared but left critically wounded by the findings of a cabinet inquiry into her role in the affair - to be revealed today - Italian sources said there was sufficient evidence to try the two men.
The latest developments come after two weeks of damaging revelations that have engulfed Ms Jowell, one of Tony Blair's staunchest allies. She is understood to remain "bullish" about her future and to have discussed her strategy with the Prime Minister yesterday at Downing Street while preparing for local elections. But the allegations showed no signs of abating.
Concern is mounting over Ms Jowell's important role during the build-up for the 2012 Olympics. In particular, there is concern over whether she used her husband's Italian connections to help win the bid for the Games to come to London.
David Davis, the shadow Home Secretary, demanded a fresh inquiry into allegations that the Home Office thwarted an attempt to extradite Mr Mills by tipping off Mr Berlusconi's officials about the intentions of the Milan prosecutors.
Mr Mills' Italian lawyer dismissed a plea bargain and that raised the prospect of legal proceedings that could stretch on for several years and cause prolonged embarrassment for the Blair government.
The decision to go to trial will be confirmed officially early next week. But, before that, Ms Jowell must brace herself for the verdict of the Cabinet Secretary Sir Gus O'Donnell's investigation into whether or not she breached the ministerial code of conduct. Sir Gus will reveal his findings in a letter to Theresa May, shadow Leader of the House, who requested the inquiry.
Sir Gus is understood to have gone over the financial allegations surrounding Mr Mills with the Italian prosecutors, and established whether Ms Jowell told her permanent secretary of a possible conflict of interests. Mr Mills is planning to issue his own statement to coincide with Sir Gus's findings.
Ministers rallied round the Culture Secretary last night.
Baroness Jay, a former cabinet minister and a friend of Ms Jowell, said she was feeling the pressure after coming under "enormous personal attack".
Even a member of David Cameron's Shadow Cabinet privately said he hoped she would be cleared. "She's a really nice person," he said. "I hope that no Conservatives try to make political capital out of this because I don't see that she has done anything wrong."
Under the ministerial code, ministers or their spouses are warned not to accept gifts that may put them "under an obligation". The code also warns: "Ministers must scrupulously avoid any danger of an actual or apparent conflict of interest between their ministerial position and their private financial interests."
It is alleged that Mr Mills received $600,000 as a reward for giving false testimony on behalf of Mr Berlusconi during corruption trials in 1997 and 1998.
Mr Mills, an international specialist on tax avoidance who set up a number of companies for the media tycoon during the 1980s, denies any wrongdoing, saying the money was given to him by another Italian client, Diego Attanasio. Ms Jowell was dragged into the row after it emerged she had signed a document remortgaging the couple's north London home and that money alleged to be from Mr Berlusconi was used to pay off her new mortgage. She, too, denies any wrongdoing.
But, despite her popularity, Whitehall sources said if Ms Jowell was not forced to resign she would be damaged by the affair. "The prosecutors are not going to let this drop," said one official. "She won't be completely in the clear." Ms Jowell will also face questions over how she secured crucial Italian support for the London Olympics. Sources from various cities in the 2012 campaign said that Mario Pescante, one of the most powerful members of the International Olympic Committee (IOC) and - as Italian sports minister - answerable to Mr Berlusconi, became a surprise convert to London after initially backing the main rival Paris. "We were astounded and perplexed by his support for London. There was a belief that Berlusconi would virtually order Mr Pescante to back London," said the source.
Mr Berlusconi, who will go on trial alongside Mr Mills, says the timing of the trial is politically motivated. He is fighting for his political life in elections that are scheduled to take place on 9 April and 10 April, and his centre-right House of Liberties coalition trails in the opinion polls behind Romano Prodi's centre-left Union coalition.
But the prosecutors in the case say that the timing of the trial was nothing to do with politics. They submitted their evidence as speedily as they were able, they say, for fear that the case could be killed off by a new statute of limitations law.
In one of his last acts before parliament was dissolved, Mr Berlusconi pushed through a law which cuts the time allowed between the committing of a white-collar crime and final appeal from 15 years to 10. That means the Mills-Berlusconi case must be carried right up to the Court of Cassation, Italy's highest court of appeal, by the end of next year - a near impossibility in Italy's sluggish and over-burdened legal system.Reuse content