Mr Berlusconi, who owns three of Italy's six main television channels and dozens of magazines, is reportedly demanding that Il Giornale, as it is usually called, back his new political crusade to unite the Italian right and keep the former Communists out of power.
He has not said so in so many words, but he told the newspaper's journalists at the weekend that the paper, which is in dire financial straits, would have all the money it needed if it fought the left.
Mr Montanelli, whose always brilliantly expressed and highly influential views are somewhere in the enlightened centre of the political spectrum, says he will quit. 'The breach is irreparable,' he told his journalists on Sunday after lunch with Mr Berlusconi.
And now, at 86, the Grand Old Man of Italian journalism is talking of starting a new, competing newspaper and taking many of the 140 journalists with him. 'I have to provide a lifeboat for my people,' he said.
A group of businessmen are already preparing a paper, the name - La Voce (The Voice) - has been registered and they plan to start publishing before the general elections in the spring.
Back at the Berlusconi camp rumour has it that a successor has already been picked - Vittorio Feltri, editor of l'Indipendente, a right-wing daily which backs the Northern League.
It seems almost irrelevant that Mr Berlusconi is not, in fact, the proprietor of Il Giornale. Under Italy's broadcasting laws, which bar him from owning daily papers as well as television channels, he last year handed the majority shareholding to his brother Paolo, retaining 36 per cent for himself.
This did not prevent him appearing at a crisis meeting of the journalists on Saturday to make his offer of cash in return for support. 'Someone could get the idea that you can cheat against the (broadcasting) law,' commented Mr Montanelli sardonically.Reuse content