Prosecutors in Italy today laid corruption charges against Silvio Berlusconi and David Mills, the husband of a British Cabinet minister, firing the starting gun on a case which threatens to taint the governments of both countries.

The Italian Prime Minister has been accused of paying Mr Mills, a tax-avoidance specialist, a £344,000 bribe for giving "helpful" testimony in two court cases in the 1990s. Both Signor Berlusconi and Mr Mills deny the charges, which carry a maximum eight-year prison sentence.

Lawyers in Milan today handed their 15,000-page dossier to Fabio Paparella, the judge who will preside over a preliminary hearing to determine whether the case should go to full trial.

Court sources have told The Times that Signor Berlusconi and Mr Mills, who separated from Culture Secretary Tessa Jowell amid escalating controversy last week, could be charged formally as soon as next week. The initial hearing could start in May.

The step means that Signor Berlusconi faces the embarrassment of corruption charges on the eve of the Italian election on April 9-10.

In a statement, a spokesman for the Prime Minister, who has always maintained that the case is politically motivated, responded: "Here it comes, in time for the elections, the voting statement of the Milan prosecutors’ office."

Defence lawyers for Mr Mills and Signor Berlusconi had asked the Milan prosecutors to postpone the trial for two months to allow time for further inquiries into Mr Mills’s claim that a $600,000 (£345,000) "gift" at the heart of the bribery and perjury case came not from Signor Berlusconi but from Diego Attanasio, a Neapolitan ship owner.

The request was denied last night by prosecutors keenly aware that the ten-year deadline for prosecutions, known as the statute of limitations, will expire at the end of next year.

The charges against Mr Mills stem from a letter to his accountant, written in February 2004, in which he said that the now notorious "gift" had come from Signor Berlusconi via Carlo Bernasconi, a cousin of the Italian leader and a senior executive in his Fininvest company, who died in 2001.

He said that Signor Berlusconi had "put a sum of money my way" as thanks for saving him from a "sea of troubles" in court. In November 2004, however, Mr Mills withdrew the statement and described the confession as an "imaginary scenario".

Ms Jowell was cleared last week of breaching the code of conduct for ministers after she said she was not aware of the £344,000 payment made to her husband of 27 years.

On Wednesday she was also cleared of any wrongdoing in failing to declare a shareholding in a brewery chain traded through a company owned by Mr Mills at a time when she was a health minister.

Tony Blair's spokesman today said that the allegations against his loyal Cabinet minister had been "dealt with".

He said: "We have to separate out two things: the issues surrounding Tessa Jowell which have been dealt with and the Italian case which we will not comment on, nor should we comment on, any more than we would comment on a case in this country."

Signor Berlusconi has been tried on at least seven occasions for corruption. He was found guilty four times, but verdicts have been overturned on appeal or the statute of limitations has applied.