Silvio Berlusconi believed Karima el Mahroug, a nightclub dancer dubbed Ruby The Heart Stealer when she told him she was the granddaughter of the then Egyptian president, Hosni Mubarak, a court in Milan was told on Monday.
His lawyers insisted he was convinced by the improbable story and intervened to have the young woman released from a theft charge in May 2010 because he feared her detention could cause a diplomatic incident between Rome and Cairo.
Mr Berlusconi, 75, put pressure on police in Milan to have the teenager, Karima El Mahroug, who is of Moroccan rather than Egyptian origin, released from custody during telephone calls made from his offices in Rome.
The defence said that as soon as he realised that Miss El Mahroug's claim to being related to the former Egyptian leader was false, he broke off all contact with her.
He chose not to intervene on her behalf when she became involved with the police on three subsequent occasions, in June 2010.
But defence lawyers strongly contested that version of events, saying the only reason the former premier did not intercede was because by that time she was in the care of one of his close associates, whose role was to allegedly prevent her from making any embarrassing revelations.
The associate, a talent scout named Lele Mora, is involved in a separate trial in which he is accused of aiding and abetting prostitution by recruiting young models and actresses for Mr Berlusconi's parties.
The billionaire businessman, who resigned last month, is on trial for abuse of office and paying for sex with an under age prostitute – prosecutors allege that Miss El Mahroug, better known by her stage name as 'Ruby the Heart Stealer', was selling herself for sex at the age of 17, a year below the limit at which prostitution is legal in Italy.
Both she and the ex-prime minister deny they had a sexual relationship, but if convicted he faces up to 15 years in prison on the two charges.
Marco Ciacci, a senior police officer from Milan, said there was strong evidence to show that the exotic dancer was working as a prostitute when she attended Mr Berlusconi's so-called "bunga bunga" sex parties.
He said the proof came from the testimony of witnesses as well as intercepted phone calls from the numerous showgirls and aspiring actresses who attended the parties at Villa San Martino, Mr Berlusconi's residence near Milan.
"There was a series of converging elements, (including) witness declarations and numerous wire taps," the officer told a prosecutor, Antonio Sangermano.
Taken together they proved that the teenager was "performing sex acts for payment," Mr Ciacci told the court.
The witnesses included Caterina Pasquino, a former flat mate of Miss El Mahroug's, who told investigators when she was questioned in 2010: "I remember that she said she was very friendly with the prime minister and that she had often been to his house where she had had dinner, danced and had sex with him, for which he paid her a lot of money."
Mr Ciacci is the first witness to give testimony in the trial, which is expected to last for months.
The next witness, Giorgio Bertoli, also a police officer, said photographs seized from guests’ mobile phones showed young women dancing around in skimpy Santa Claus outfits, apparently for the entertainment of the then prime minister.
Another woman, Barbara Guerra, wore handcuffs and a kinky police uniform.
Some of the photos were taken from the Blackberry of a Romanian model, Iona Visan.
The pictures, which were presented in court, also showed women engaged in “mutual petting”, in what appeared to be a mock lesbian show.
Another picture, taken at 4.51am on Oct 24, 2010, appeared to show an unmade bed in Mr Berlusconi’s bedroom — framed photographs of the media mogul are visible in the image.
Mr Bertoli said one of the showgirls who attended the parties received three payments of 2,000 euros from Mr Berlusconi.
Police seized a diary from Iris Berardi, a Brazilian model, in which during the first six months of 2010 she recorded receiving the money from ‘Papi’ — the nickname the girls used for Mr Berlusconi.
Intercepted phone calls between Miss Berardi and two friends, in which she talked about sleeping with “clients”, indicated that she was a professional escort, Mr Bertoli told the court. The model referred in another wire-tapped conversation to women demanding money to attend the “bunga bunga” parties.
Mr Berlusconi was not in court for the hearing. The trial was adjourned until January 27.