David Mills tells Berlusconi trial of 'false letter'
UK lawyer David Mills has told a court he is "deeply ashamed" for falsely claiming former Italian Prime Minister Silvio Berlusconi had given him $600,000 (£382,000).
Mr Mills said the money had actually come from an associate he had not wanted to admit dealing with.
He was testifying in Mr Berlusconi's trial in Milan via a video link from Westminster Magistrates' Court.
The ex-PM is accused of paying his tax lawyer to lie under oath in the 1990s.
The trial is one of four which Mr Berlusconi, who stepped down last month, is involved in. He denies the charges.
Mr Mills, who is separated from his wife, former Labour cabinet minister Tessa Jowell, was convicted of perjury in his absence in February 2009.
But a year later he was acquitted by the Italian Supreme Court under the country's statute of limitations.
Giving evidence, Mr Mills described the letter he wrote as "a scenario that I invented in order to be presented to the Inland Revenue".
"It's pure imagination. It's fiction. It's a novel," he added.
Mr Mills, who gave the letter to his accountant Bob Drennan in early 2004, told the court the money had actually come from his friend and associate Diego Attanasio.
"I had two major worries," he told the court.
"The first was that I had to be able to justify to the Inland Revenue why I had registered it as a gift and therefore not taxable.
"My second concern was in relation to Diego Attanasio. I had two reasons to be worried about him as I didn't want to cause him trouble in Italy and, secondly, because I was investing in his affairs and I didn't wish that to be a subject of any interest either."
Pressed further by Italian prosecutors on the letter, Mr Mills said: "I was in a panic, unable to sleep and was not in a normal state of mind.
"I needed to provide to the Inland Revenue a story which explained why I had treated the money as a gift and not as income.
"In other words, to show to the Inland Revenue that I had made a mistake in good faith and not because I was merely trying to evade my taxes."
On Monday, Mr Mills was warned that he may commit an offence under the Italian legal system if he did not give full answers to a court.
Mr Berlusconi faces two other corruption trials and is also accused in another case of paying an underage prostitute and of abuse of power.
In all cases he says he is innocent.