By Ilaria Polleschi and Silvia Aloisi
MILAN (Reuters) - An Italian appeals court unexpectedly overturned Silvio Berlusconi's conviction on charges of abuse of office and paying for sex with a minor, in a significant legal victory for the former prime minister.
The Milan court on Friday threw out a guilty verdict handed down last year by a lower tribunal, which had sentenced Berlusconi to seven years in jail and banned him from holding public office.
Berlusconi was accused of paying for sex with former teenage nightclub dancer Kharima El Mahroug, better known under her stage name "Ruby the Heartstealer", during "bunga bunga" erotic parties at his palatial home near Milan.
He was also charged with abusing his authority to get El Mahroug released from police custody over unrelated theft accusations.
In a brief statement read out in court, the judges fully acquitted Berlusconi on both charges. Their ruling could be overturned if prosecutors lodge a final appeal with Italy's top court.
Even so, the verdict came as a huge relief to the embattled 77 year-old, who has suffered a series of reverses, including being forced to serve a one-year community service sentence in an old people's home after a conviction for tax fraud last year.
"I am deeply moved," Berlusconi said in a statement after the ruling. "Only those who have been close to me over the years know what I have suffered because of this unfair and disgraceful accusation."
His lawyer Franco Coppi said the verdict "goes beyond our rosiest expectations."
The four-times prime minister, still the most influential politician on the center right despite bitter infighting in his Forza Italia party, had always denied the charges, accusing the Milan magistrates of hounding him for political reasons.
Renato Brunetta, Forza Italia's floor leader in the lower house of parliament, said the verdict confirmed Berlusconi's innocence completely. He said that the party's agreement with Prime Minister Matteo Renzi to pass a series of constitutional reforms would stand. Had the verdict gone the other way, many commentators had suggested the accord could fall through.
"BUNGA BUNGA" PARTIES
The so-called Ruby trial was the most sensational case Berlusconi faced. It mesmerized Italy with its lurid accounts of sex parties at the billionaire tycoon's villa outside Milan while he was premier in 2010. A stream of would-be starlets on his TV channels took the stand as witnesses.
The most serious allegation for Berlusconi in the case was that he called police in May 2010 to press for the release of El Mahroug, who was being detained on suspicion of stealing a 3,000-euro bracelet, to cover up his relationship with her.
Berlusconi's lawyers argued he made the call to avoid a diplomatic incident, because he thought that El Mahroug, who is actually Moroccan, was a relative of Hosni Mubarak, then Egyptian president.
Berlusconi and El Mahroug both have repeatedly denied ever having sex together.
The appeals court will give an explanation for its verdict in 90 days, but Berlusconi's lawyer Coppi said a possible reason for his acquittal on the underage prostitution charge was that judges believed he did not know El Mahroug was under 18.
The final ruling in the trial could have implications for Berlusconi and his freedom to engage in political activity beyond the case itself.
Berlusconi received a definitive conviction for tax fraud last year and was stripped of his seat in parliament. He was given a four-year jail sentence, but that was commuted to a year's community service under a general amnesty, leaving him largely free to campaign in elections and play a political role.
However, a second definitive conviction in a criminal trial would violate the terms of the amnesty. That could mean Berlusconi would have to serve time under house arrest.
(Additional reporting by Manuela D'Alessandro, writing by Silvia Aloisi; editing by Ralph Boulton, Larry King)