A court in Milan on Friday sentenced former Italian premier Silvio Berlusconi to four years' imprisonment for tax evasion - but it was almost immediately cut to one year after judges said he won a three-year remit on his conviction thanks to a 2006 pardon law.

The law was passed by parliament when Berlusconi's centre-left opponent, Romano Prodi, headed the Italian government. It was adopted to tackle massive overcrowding in Italy's prisons.

Berlusconi was also banned from holding public office for five years. News reports had earlier mistakenly spoken of a three year ban, which instead refers to managerial positions within companies.

The ruling came two days after the 76-year-old businessman and politician announced he would not run again for prime minister in elections due next year.

Berlusconi will not serve his sentence if he - as is likely - appeals against the first instance ruling. The expiration of the statute of limitations, which the former premier shortened when he was in office, may also bring a complete end to proceedings.

His lawyers protested against "an absolutely incredible ruling," noting that Berlusconi had been acquitted last year of very similar accusations, which referred to more recent Mediaset accounting practices.

Prosecutor Fabio De Pasquale had pleaded for Berlusconi to be sentenced to three years and eight months.

Judges backed De Pasquale's charge that Berlusconi's media firm Mediaset had adopted a fraudulent accounting scheme to inflate the price paid for TV rights acquired from the United States via offshore companies.

This allowed Mediaset to exaggerate losses on its balance sheet, reducing its tax liabilities, and finance a slush fund. De Pasquale calculated that 14 million euros (18 million dollars) were evaded in this way.

Berlusconi and three other convicted defendants were ordered to refund Italy's tax authorities. Before the full extent of damages is calculated, they should make a provisional downpayment of 10 million euros, judges said.

Six other defendants, including Mediaset Chairman Fedele Confalonieri, were acquitted. However, Mediaset shares were down 3.1 percent at the end of trading Friday on the Milan stock exchange.

Friday's ruling offered "yet another proof" that judges are persecuting Berlusconi, Angelino Alfano said. Alfano heads Berlusconi's party, the People of Liberty, and is his political heir apparent.

The former premier remains in the dock in the higher-profile "bunga bunga" trial, where he is accused of having paid for sex with a minor - the go-go dancer Karima el-Mahroug, also known as Ruby Rubacuori (Stealer of Hearts).

Berlusconi, who denies all the charges, is also accused of abusing his position by pressuring police to release the then-17-year-old Mahroug after she had been arrested on theft charges by claiming she was the nephew of former Egyptian president Hosny Mubarak.

A first instance judgement on the case is expected to be delivered
in December.

During a court hearing earlier Friday, the prosecution accused Berlusconi's lawyers of playing delaying tactics with their attempt to call U.S. actor George Clooney to testify for the defense.

Clooney was summoned last week, but said he could not show up at  such short notice. Another defence witness, Clooney's former Italian girlfriend Elisabetta Canalis, also said she could not appear on Friday.

"Do you think it would have been possible to arrange something with the U.S. actor in less than a week?" prosecutor Ilda Boccassini protested before the court.

Another hearing will have to be arranged to hear Clooney and Canalis, extending proceedings. Boccassini charged that Berlusconi's lawyers were wasting time in order to get the statute of limitations to expire.

Mahroug claimed to have seen Clooney and Canalis at one of Berlusconi's late night parties. The US actor has denied this, and his testimony may serve to discredit the dancer.