Up to 200 Italian police 'ran parallel anti-terror force'

The shadowy group appears to have set itself up as a private security firm, offering protection to senior figures, and illicitly using official police resources. Its leaders have been accused of "usurping" public functions and illegal usie of classified data.

Judge Francesco Lalla, Genoa's chief prosecutor, said the self-styled "Department for Anti-terrorist Strategic Studies," (Dssa) maintained an arsenal of weaponry, stored by its accused commanders Gaetano Saya and Riccardo Sindaco, both with links with the Italian far right. The revelations have heightened many Italians' unease about the strategies of the government of Silvio Berlusconi, the Prime Minister, against Islamist terrorism.

Judicial sources said the Dssa recruited from police, paramilitary carabinieri, finance police and the armed services and presented itself to Italian institutions as well as potential recruits as an elite body specialising in fighting Islamic and Marxist terrorism.

Mr Saya, now under house arrest, had applied for €32m (£21.6m) in European Union finance and had allegedly sought contact with the Vatican to try to obtain a contract to protect of Pope Benedict against terrorist attack.

Magistrates focused on the Dssa after it allegedly claimed to have a video of the murder in Iraq of the Italian hostage Fabrizio Quatrocchi and tried to sell the footage. Investigators are trying to determine what official support the organisation may have had.

The Interior Minister, Giuseppe Pisanu, has suspended dozens of police officers who joined the network. But Carlo Taormina, an MP from Mr Berlusconi's Forza Italia party, insists Dssa was a bona fide security company with nothing to hide and "the high commands of the police and intelligence services were aware of its existence".

Il Messaggero quoted an investigator who said it was particularly disturbing that phone intercepts suggested Dssa members had been planning to kidnap Cesare Battisti, a Red Brigades activist living in exile in Paris. "We were seeing the genesis of something similar to the death squads in Argentina," the magistrate is reported to have said.

The group was charged with making unauthorised use of interior ministry data bank information as well as equipping cars with sirens and flashing lights and the official "lollipop" sticks, used by Italian police to stop traffic or wave as they break traffic regulations.

Gilberto Di Benedetto, an associate of Mr Saya who acted as a middleman with the Vatican, said most members had joined the Dssa in good faith, despite its farcical aspect. "There were people who were hoping for power or to become private investigators, but there also were many police officers and sergeants who believed the Dssa would advance their careers," he said.

La Repubblica newspaper quoted Michael Scheuer, a former CIA agent and head of the "Bin Laden unit" at CIA headquarters in Langley, Virginia, until last November, as saying the head of Italy's military intelligence agency Sismi had authorised the CIA to abduct Abu Omar, a militant Islamic cleric who was flown from Milan to Egypt and reportedly tortured.

Mr Berlusconi's government denies knowledge of the affair, which became public after Milan magistrates issued arrest warrants for 13 CIA agents.