The uproar over the decree is the most serious challenge yet to his two-and-a-half month old government. But Mr Berlusconi, his voice agitated and growing hoarse, said he was 'open to improvements' on the decree. Last week's measure ended pre-trial detention for most suspects. The Prime Minister said detention led to months of jail for people not yet judged guilty.
Mr Berlusconi's opponents accused him of trying to bail out the disgraced political old guard, more than 3,000 of whom have been implicated in corruption, and of protecting those under investigation.
'This decree is not an amnesty for anyone,' Mr Berlusconi told TG-4 news. 'We must have a faster, more efficient justice system. We must respect the rights of everyone.'
A government spokesman had said on Sunday that the government was on the verge of collapse after the Interior Minister, Roberto Maroni, said he was deceived into going along with the decree, not expecting it would lead to the release of the most notorious corruption suspects.
The Constitutional Affairs Committee of the Chamber of Deputies is to begin considering the measure today. If it is struck down, prosecutors will have to decide whether to issue new orders sending suspects back to their cells.
Mr Berlusconi appears to have scored a stunning own goal, misreading the mood of the nation and placing himself on a collision course with Italy's highly popular magistrates. Mr Maroni summed up the public-relations disaster: 'The government has given the impression that it wants to protect its friends,' he said.
Pino Rauti, a hardliner in the neo-Fascist National Alliance, the other partner in Mr Berlusconi's tripartite coalition, put it even more succinctly: 'Millions of Italians did not vote for us so we would absolve thieves and let them out of jail,' he said.
Mr Berlusconi's close friendship with the former Socialist prime minister Bettino Craxi, one of the most reviled figures of the Tangentopoli (Bribesville) scandal, has long been used by the left- wing opposition as a stick with which to beat him.
Now commentators forecast that the 57-year-old billionaire, who smiled his way to triumph in general elections in March with televisual talk of clean government and economic miracles, will lose out, however the crisis unfolds.
'Either the decree will have to be changed - an evident defeat for Berlusconi - or the government will collapse and there may have to be early elections, which the right will have to fight facing a massive wave of popular protest,' La Repubblica newspaper said in an editorial.
In the six months since he entered politics, Mr Berlusconi had appeared unstoppable, sweeping away the tired and tainted old class that had run Italy for decades with a new approach to government straight out of the company boardroom. He purpose-built his party with the vast resources of his Fininvest business empire, named it after the national soccer cry, Forza Italia (Go Italy), and tapped a rich vein of popular resentment generated by the country's corruption scandals.
Just last week he was on the crest of a wave, hailed for his successful chairmanship of the Group of Seven summit in Naples and with Italy through to the World Cup soccer final.
Ironically for Mr Berlusconi, whose champion club, AC Milan, has seven players on the national squad, the World Cup dream ended on Sunday in defeat to Brazil in a penalty shoot-out.
Il Giornale newspaper, owned by the Berlusconi family, carried two photographs on its front page yesterday - one of an apparently downcast Mr Berlusconi, the other of a dejected Roberto Baggio, the soccer star whose missed penalty sealed the loss.
The decree that has dented Mr Berlusconi's image as the voice of ordinary Italians severely limits use of preventive detention for a string of offences, including bribery and corruption.
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