Sex, lies and a taped phone call: Ruby's words come back to haunt Berlusconi

Dancer allegedly told friend former prime minister offered to 'cover her in gold' to keep quiet

The teenage belly dancer allegedly paid by Silvio Berlusconi for sex told a friend that she began "seeing" the former Italian prime minister when she was just 16 years old – and that she later demanded €5m (£4m) from him to keep quiet about it, according to wiretaps which emerged yesterday.

Mr Berlusconi is on trial in Milan, accused of paying for sex with a minor and abusing his office to cover up the act. Both Karima "Ruby" El Mahroug and Mr Berlusconi deny having had sex together.

But in the intercepted phone calls, Moroccan-born Ms El Mahroug, now 19, is heard telling a friend: "I know Silvio and now the fact is coming out that I'm a lover of Silvio. He's crazy about me. I've been seeing him for a year now. It's in all the papers. He's told me to pretend I'm crazy."

The conversation will be used by prosecutors as evidence of illegal sexual relations and of the lengths to which Mr Berlusconi and his aides were prepared to go to cover them up. At least 13 sexual encounters are said to have taken place during or after the notorious "bung-bunga" parties at his Arcore mansion outside Milan in 2010.

"He called me yesterday and said I'll give you all the money you want, I'll pay you, I'll cover you in gold but the important thing is that you hide everything and don't tell anyone anything," she is heard saying on the wiretaps, which were published on the website of Italy's La Repubblica newspaper yesterday. In another conversation, Ms El Mahroug reveals that she asked the billionaire for €5m to keep quiet.

Mr Berlusconi has denied all charges. He has frequently criticised the courts and accused investigating magistrates of harbouring a politically-motivated grudge against him.

The mogul, whose premiership collapsed late last year amid the growing financial crisis and after numerous scandals, has consistently described his notorious soirées, in which prosecutors claim he paid for sex with 33 women, as "refined and elegant parties". Last week he appeared at the Milan court and told reporters: "Bunga bunga? It was just a burlesque competition." Details recently emerged of how strippers in nun costumes performed for him during one of the "elegant" dinner parties.

Bank records have revealed that since the start of the 'Rubygate' trial, the billionaire has paid a total of €127,000 to three key witnesses. These include one of the dancing "nuns", Nicole Minetti, now a regional councillor for Mr Berlusconi's People of Freedom (PDL) party.

Mr Berlusconi has denied that he was trying to buy favourable testimony from the three women, declaring that the payments were an act of generosity towards the women whose reputations had "been ruined by the prosecutors".

The sex offence facing Mr Berlusconi carries a maximum three-year sentence, and abuse of office can be punished with 12 years in prison. However, under Italian sentencing guidelines, Mr Berlusconi, as a 75-year-old, would not go to prison if found guilty. He denies all charges. He is also entitled to two appeals under Italian law.

Observers say that the 'Rubygate' trial represents magistrates' best chance of achieving a definitive conviction against Mr Berlusconi.