Berlusconi's Milan mayor ousted by the centre-left

Silvio Berlusconi last night suffered a humiliating and potentially disastrous defeat as his right-wing coalition lost control of Milan after conducting one of the dirtiest election campaigns in recent memory.

Defeat in the key northern city could fatally undermine his already tottering government. Victory by centre-left candidate Giuliano Pisapia, a former communist, will also enrage the conservative premier, who regards Milan, Italy's business capital, as his home turf.

Mr Berlusconi was so determined not to cede the city to the centre-left that he took personal charge of the campaign to have incumbent mayor Letizia Moratti re-elected. But his involvement appears to have backfired in the first major poll test for the 74-year-old billionaire since he was charged with sex offences and abuse of office in relation to the Rubygate investigation.

Last night, and with just a few hundred votes to be counted, Mr Pisapia looked to have won 55 per cent of the votes, against his rival's 45 per cent.

A centre-right critic of the Prime Minister in parliament, Italo Bocchino, said: "Berlusconi has lost a referendum on himself."

By early evening Mr Pisapia supporters began celebrating in the city's Duomo Square, where 18 months ago Mr Berlusconi was assaulted with a replica of the famous cathedral.

The importance of the election in the premier's mind was illustrated by the fact the media-mogul appeared more concerned by the poll than today's resumption of the Rubygate trial at Milan's Palace of Justice, where he faces 15 years in prison if found guilty. Mr Berlusconi has already said he cannot attend today's session due to government business.

The centre-right's woes were compounded by news that it had suffered a crushing defeat in the southern city of Naples, where exit polls suggested centre-left mayoral candidate Luigi De Magistris had an enormous 30 per cent lead on his opponent Gianni Lettieri.

But the loss of Milan will be the biggest blow to Mr Berlusconi. His minority coalition partner, the xenophobic Northern League, had made thinly veiled threats before the election that it would pull the rug on the Berlusconi administration or demand new cabinet seats if it failed to keep the left out of Milan's mayor's office.

The centre-right seems to have repelled rather than won over voters with its squalid campaigning, in which "left-wing" judges were compared to Red Brigade terrorists. Mr Berlusconi himself warned that Milan would become "zingaropoli" – gypsyville – if the left won, while his supporters warned that mosques would spring up on every street corner.

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