Prodi slammed over Telecom defence

Prime Minister Romano Prodi was called a liar in Parliament yesterday as he defended his role in a clash with Telecom Italia, saying there were no plans to interfere with or renationalise the company.

"The government does not intend to interfere in any way with the company's strategy, nor give indications or set vetoes on the choices (the company) will carry out," Prof. Prodi said in a speech which had to be halted temporarily because of heckling from the centre-right opposition. Prof. Prodi spoke minutes after Infrastructure Minister Antonio Di Pietro called on Telecom Executive Deputy Chairman Carlo Buora to resign for the duration of a judicial probe into a wiretapping scandal involving an ex-Telecom manager.

Telecom Italia has said it did nothing wrong in the case. The opposition accused Prof. Prodi of lying when he said earlier this month he was unaware of Telecom Italia's plans to change strategy and of recommendations made by a close aide that the company cede its network - prompting opposition charges the centre-left planned to renationalise swathes of the economy.

"Today you have lied. You have lied to the chamber and to the country: and that is why from today you cannot govern this country with the necessary dignity," said Giulio Tremonti, a prominent member of former premier Silvio Berlusconi's Forza Italia party and a former economy minister.

Prof. Prodi said yesterday the Italian telecoms regulator would set out rules with Telecom Italia for any spin-off of its fixed-line network. Earlier this month, Telecom Italia's controlling shareholder Marco Tronchetti Provera unveiled a radical strategy shift to focus Europe's fifth-largest telecoms group on broadband and media.

The company will now split into three, creating new units to hold its fixed-line network, mobile unit TIM and the broadband and media operations.