UPDATE 3-Berlusconi dismisses accusations at fraud trial

* Berlusconi defiant after trial hearing

* Dismisses fraud, prostitution charges

* Crowds of supporters outside courthouse

(Updates after hearing, adds more quotes from Berlusconi)

By Antonella Ciancio

MILAN, April 11 (Reuters) – A defiant Italian Prime Minister
Silvio Berlusconi emerged from court on Monday to launch a
bitter attack on “leftist” magistrates who have accused him of
offences ranging from tax fraud to paying for sex with a minor.

“I have spent a surreal morning,” he told a cheering crowd
of supporters gathered outside the Milan court where the latest
in a related series of hearings was held on tax fraud charges
related to his Mediaset broadcasting empire.

“The prime minister is being accused by prosecutors who are
slinging mud at him and at the country at a time when we should
be stronger so as to be able to defend the country on the
international stage,” he said.

His decision to appear in court on Monday contrasted with
his absence from the start of the more embarrassing “Rubygate”
case last week, where he is accused of paying an underaged
teenager for sex and abusing the powers of his office to try to
cover the case up.

Berlusconi said nothing in court but, speaking to supporters
before the hearing, he called the prostitution charges against
him “groundless” and said he was the victim of an attempt by
leftist enemies to eliminate him from the political scene.

Monday’s trial centred on charges that Mediaset bought
television and film rights at inflated prices through offshore
front companies, leaving the difference to be skimmed off to
avoid tax and create secret slush funds.

Both Mediaset and Berlusconi deny the charges. “It is an
unbelievable accusation,” Berlusconi said. “I’m supposed to be
crazy enough to keep a corrupt head of purchasing who chisels
his own company? No businessman in the world could do that.”

The billionaire prime minister, who has had at least a dozen
trials over the years, has dismissed opposition calls to resign
and, after overcoming a bitter party split last year, appears to
have the numbers in parliament to see out his term until 2013.

“A STORY THAT MOVED ME”

However the spate of trials and weeks of newspaper reports
of “bunga bunga” sex parties with dozens of young women at the
prime minister’s palatial private residence outside Milan have
steadily undermined his approval ratings.

The Mediaset trial, one of three connected trials linked to
the sale of television and film rights dating back to the 1990s,
is not related to the “Rubygate” case.

In that case, Berlusconi is accused of paying for sex with a
Moroccan-born nightclub dancer when she was under the age of 18
and thus too young under Italian law to be paid as a prostitute.

As he entered the courthouse on Monday, Berlusconi said he
was only trying to help the girl, a runaway from a care home
called Karima El Mahroug, “because she told me a story that
moved me” and he had wanted to help her find a job.

He said he had given her 45,000 euros ($65,070) to buy a
piece of laser depilation equipment that would have allowed her
to join a friend in setting up a beauty centre.

He also denied what he called the “ridiculous” abuse of
office charges which arose over a call he made to Milan police
after El Mahroug was held over an unrelated allegation of theft.

Berlusconi said he believed her to be the niece of former
Egyptian President Hosni Mubarak and admits he made the call to
prevent a diplomatic incident, but denies pressuring officials.

His centre-right government has been pushing through
legislation to curb the powers of the magistrates, prompting
critics to accuse him of trying to pass specially tailored laws
that would allow him to escape trial altogether.

The trials were effectively suspended by a measure passed by
his government which allowed him to claim that his official
duties meant he did not have enough time to prepare his defence
and could therefore claim immunity from trial while in office.

The constitutional court ruled against the measure in
January, prompting magistrates to re-open the fraud trials and
bring the prostitution case to court.
(Writing by James Mackenzie and Philip Pullella; Editing by Jon
Boyle)

UPDATE 3-Berlusconi dismisses accusations at fraud trial