Valentino Rossi, the seven-time world motorcycling champion, has agreed to hand over €35 million in unpaid tax.

The 28-year-old will pay €19 million for the period 2001-2004, but the sum could rise to as much as €35 million when the Moto GP star's earnings for 2005-06 are taken into consideration.

Back in August the Italian tax office said it was investigating Rossi over allegations of tax evasion, linked to his decision to go and live in London in 2000.

Rossi released a statement in which he revealed his relief at the outcome of the proceedings.

"I'm very happy with the way this difficult affair has turned out because I think I will be calmer now and that will help me to concentrate on my work," he said.

"For several reasons I've already decided to return to live in Italy. London is a very interesting city but spending more time with my family and friends has become a necessity for me given that due to my commitments on the [Moto GP] tour I spend more than half the year away from home.

"I could not return if I had problems with the Italian tax authorities. I could not allow this to drag on either. I've come to an agreement with the Tax Agency which will allow me to return calm and ready ahead of the new season."

After reigning supreme for seven years, including five times in Moto GP, Rossi failed to win either of the last two Moto GP titles with American Nicky Hayden and then Australian Casey Stoner beating him to the world crown.

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