Prodi set to sue for libel over corruptionallegations

ROMANO PRODI, the European Commission president, said last night he was taking legal action over allegations about his past business dealings.

The move is a change of tactics by Mr Prodi, who has for six months ignored press allegations about his record in the commercial sector in Italy. In a statement, he attacked the "repetitive and widespread nature of the campaign". He claimed it was "characterised by extreme inaccuracy", seriously damaging his "image and reputation".

The catalyst for the change seems to be a book by Ferdinando Imposimato making new allegations that have been reported recently by Il Giornale, the Italian daily, and by The Daily Telegraph. Neither paper is mentioned in the Prodi statement and no writs have been issued, and one source said that as yet there was "no precise target for the libel action".

Although the statement was headed "the president of the European Commission takes legal action to protect his good name", it was vaguely worded and left open the possibility that legal action will be limited to Italy. Some interpreted it as a warning shot rather than the beginning of a big legal battle.

A three-page statement from the European Commission set out a detailed rebuttal of charges made relating to three specific cases. Most allegations have arisen from Mr Prodi's role as head of Italy's giant state holding company IRI and the privatisations attempted during his tenure.

The statement said the Commission president would seek "full compensation for the damage suffered until now", although this would be paid to an Italian anti-Mafia association.