Milan

FORMER prime minister Bettino Craxi, one of the most illustrious

casualties of Italy's corruption investigations, was sentenced yesterday

to eight and a half years in jail after being convicted of fraud.

Craxi was not in court for the ruling that found him, his former No 2

in the Socialist Party, and three other defendants guilty of fraudulent

bankruptcy in connection with the collapse of Italian bank Banco

Ambrosiano a decade ago.

It was the first trial involving a leader of one of Italy's disgraced

traditional parties to reach the sentencing stage.

The public prosecutor had demanded an 11-year jail sentence on Craxi,

alleged to have accepted #4.6m from the bank before it collapsed in 1982

in Italy's biggest financial failure.

The former Socialist Party leader, who is at his Tunisian holiday

home, dismissed the accusations as fantastic.

''I don't protest at the injustice (of the sentence) because justice

has nothing to do with this. The accusation is absurd,'' he said in a

statement.

Licio Gelli, former grandmaster of the outlawed Propaganda Two (P2)

masonic lodge, was jailed for six and a half years, while architect

Silvano Larini, a Craxi associate, received five and a half years and

Leonardo Di Donna, a former senior executive at state energy company

ENI, got seven years.

The ruling was only a preliminary judgment and there are two appeal

stages before Craxi or his fellow defendants would actually have to go

to jail.

Craxi is involved in three other corruption trials and some 20

different investigations.

The accusations range from illegal financing of parties to corruption.

But they pale beside possible charges to be brought against another

ex-premier, Giuliano Andreotti, who could face trial on charges of being

the Mafia's main political protector in Rome.

Craxi has been in Tunisia for months and his lawyers say he is too ill

to travel back to Italy because of diabetes.

A Judge has rejected a request by a Rome public prosecutor for an

international arrest warrant to be issued for Craxi to force him to

return to attend the trials. But the Judge ruled his passport would be

seized if he did come back.

The Banco Ambrosiano collapsed shortly after its chairman Roberto

Calvi, a P2 member dubbed ''God's banker'' because of his close

relations with the Vatican, was found hanging from Blackfriars Bridge in

London.