Mr Berlusconi was found guilty of illegally giving $12m to his Socialist Party friend - also a former prime minister - Bettino Craxi, through an offshore holding company in the Channel Islands.

Corruption convictions

A Milan court sentenced Mr Berlusconi to two years and four months' imprisonment, and gave him a fine of $6m.

It sentenced Mr Craxi, who is in voluntary exile in Tunisia, to four years' jail and issued him with a $12m fine in connection with the same offence.

It is Mr Berlusconi's third prison sentence for corruption in the past seven months.

He has already been convicted on one count of tax fraud and, in another case, of bribing tax inspectors. He faces six other criminal prosecutions for alleged bribery and false accounting.

Legal loophole

The BBC's David Willey, explains why Mr Berlusconi may never be jailed

But the BBC correspondent in Rome says that Mr Berlusconi may not have to go to jail for many years yet because sentences have to be confirmed by an appeals hearing.

He says there is a heavy log-jam of cases before Italian appeal courts because every criminal verdict, whatever the gravity of the case in question, is routinely sent for review by a higher court, so a final verdict can take up to 10 years to deliver.

He adds that this is the reason why only approximately 30% of those found guilty by the Italian judiciary ever end up in prison.

Mr Berlusconi, the head of the right-wing Forza Italia party, is now leader of the opposition in the Italian parliament.

Our correspondent says this latest verdict against Mr Berlusconi - one of Italy's wealthiest businessmen - will most likely spur him on to launching a political counter-attack in parliament.

Mr Berlusconi claims he is the victim of a political vendetta by the Milan judiciary, who have prosecuted dozens of national and Milanese politicians and businessmen on corruption charges.