ON THE edge of Milan is the city that Silvio built. Far from the grit and grime of Italy’s northern commercial capital, it is an oasis of calm, an exclusive enclave of terracotta flats with sports complex, swimming pool and tinkling fountains.

This large private suburb, constructed in the 1970s and now home to 10,000 Milanese, was the first building block of Silvio Berlusconi’s empire. With typical braggadocio, the young entrepreneur called it “Milano 2”. Imagine a developer calling his pet housing project Manchester 2 and you get a sense of Signor Berlusconi’s limitless self-belief.

This was never just a property investment. By buying in Milano 2 Italians were buying into the Berlusconi vision of the Italian Dream: glamorous, Americanised, expensive and artificial.

With time, the citizens of Milano 2 could not only live in houses created by Silvio but they could also watch Berlusconi TV stations, read his magazines, bank at his bank, shop at his supermarket, buy the books and magazines published by his company and cheer on the football team he owned, the mighty AC Milan. Finally, when the magnate went into politics, they could vote for him. A word was invented to describe this way of life: Berlusconismo.

But there was another, less shiny, side to Milano 2. When the young Signor Berlusconi announced his plan to build a smart housing estate in a muddy field it was pointed out that the planes from the airport flew directly overhead. Mysteriously the flight paths were diverted and the price of Milano 2 apartments leapt. It was never clear exactly where the cash for the project had come from; the rumours of dirty money and Mafia involvement were never proven but never went away. In the fragrant, forsythia-lined paths of Milano 2, there was something distinctly fishy.

Today, after five years in power, the longest term of any postwar Italian prime minister, Signor Berlusconi is fighting for his political life. Voting begins tomorrow and ends on Monday. The last opinion polls showed his coalition trailing the Centre Left, led by Romano Prodi, the former European Commission President, by up to five percentage points.

For the first time in his political career the man who glories in the nickname Il Cavaliere, the knight, seems rattled, his attempts to gain a last-minute advantage increasingly desperate. Big business has turned against him. His allies on the Right are starting to distance themselves and shares in Mediaset, the broadcasting company he controls, have started to suffer as investors anticipate his defeat.

If Il Cavaliere is unseated it could mark the end of one of Italy’s most extraordinary political careers. Signor Berlusconi strode the stage in operatic style. Brash and brilliant, like all great entrepreneurs (and some of the most successful politicians) he had no time for convention. If the rules stood in the way he went around them; he said exactly what came into his head (which was often unprintable); he rewarded friends and savaged enemies.

But after years of legal investigations, economic stagnation, offensive gaffes and unfulfilled promises, many Italian voters have had enough. Milano 2 remains Berlusconi bedrock but even here there is disillusionment. “I will vote for him again, of course,” said Alessandra Menotti, pushing her three-year-old son around a pond. “But I’m disappointed. He has not delivered what he promised, yet.”

Before Milano 2 Signor Berlusconi, a former cruise ship crooner and vacuum cleaner salesman, was just another businessman of modest means looking for a break. The exclusive package offered to residents of Milano 2 included a dedicated cable TV channel; this became the kernel of a strategy to break the monopoly of the state broadcaster, RAI. By the 1980s Signor Berlusconi had become a pioneer of commercial television, churning out soap operas and game shows with barely clad female hosts. Critics disdained his output as “pap” but the money poured in.

Today Signor Berlusconi is worth at least $12billion, making him the wealthiest man in Italy and the 37th richest in the world. Mediaset controls 63 per cent of the advertising market. His publishing company, Mondadori, produces more titles than any other in Italy. His brother controls one daily newspaper, his wife another.

The burgeoning Berlusconi empire relied heavily on the Socialist Prime Minister, Bettino Craxi, so when a bribery scandal in 1993 brought yet another government down and Signor Craxi fled to avoid prosecution, the tycoon set up his own political party, a new wholly owned subsidiary of Berlusconismo.

Forza Italia (a name derived from a football chant) was a triumph of marketing, reflecting his uncanny grasp of popular culture. In March 1994 he became Prime Minister despite the conflict of interest between his roles as national leader and media magnate. Seven months later he was out of office again, and under investigation for corruption, but in 2001 he was triumphantly returned to power promising “a new Italian miracle”. The Berlusconi political brand was unstoppable. So, it seemed, were the lawsuits. He has been the subject of more than 90 investigations; most recently prosecutors called for his indictment for allegedly bribing David Mills, the husband of Tessa Jowell, the Culture Minister, to give favourable testimony in a case.

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