An Italian court has quashed corruption charges against Prime Minister Silvio Berlusconi under a statute of limitations.

The three judges in Milan started their deliberations yesterday. 

The ruling, read to a packed court in Milan's Palace of Justice, implied that Mr Berlusconi was guilty of one count of corruption of a Rome judge in 1991, but could not be sentenced because of the time limit.

Under Italian law, a court can accept 'mitigating circumstances' for a defendant with a clean record, and halve the usual 15-year statute of limitations.

As the charge dated back to 1991, the prime minister was saved from a potentially devastating verdict.

The court then acquitted him of a second charge of bribing judges.

Berlusconi's lawyer, Gaetano Pecorella, told reporters that Mr Berlusconi would nonetheless appeal the ruling and seek a full acquittal in both counts of corruption.

Opposition politicians said the verdict left a shadow over his ability to govern, because the court had not declared him fully innocent and had used a legal mechanism that prevented sentencing.

Prosecutors had demanded an eight-year jail term for Mr Berlusconi, who was accused of bribing judges in the 1980s to favour his business interests. 

He denied the charges.