One week after the humiliating local electoral defeat of Silvio Berlusconi's center-right government, the clan Berlusconi have started to dump their shares in Mediaset - Italy's largest non-state broadcaster - controlled by the prime minister and his relatives.

The clan's holding company, Fininvest, announced the disposal of a €2 billion ($2.58bn; £1.36bn) block of shares, reducing its investment in the company from 51% to 34.3%. The reduced stake, however, still represents a controlling interest.

According to J P Morgan, the bank overseeing the stock placement: "The timing is following the recent poor performance of the ruling coalition in the regional elections."

The Berlusconi party lost eleven of 13 regions - a result exacerbated, many believe, by widespread resentment at the conflict of interest posed by ownership of a powerful broadcast medium by a senior politico.

But a JPM spokesman denied this was the reason for the disposal: "You know the famous conflict of interest is subsiding," he said, adding that the prime minister wanted to "raise capital."

But Berlusconi's opponents say the share sale is nothing more than shadow play. "He's still the owner, he keeps control, so it has nothing to do with the conflict of interests," said opposition leader Romano Prodi, the former president of the European Commission.

Data sourced from International Herald Tribune Online; additional content by WARC staff