The former prime minister, back in vogue after this year's elections, has already paid out 564 million euros ($733 million) to businessman Carlo De Benedetti's CIR holding (>> CIR Group) in the battle, which relates to the 1991 sale of Mondadori (>> Arnoldo Mondadori Editore SpA).

But the hearing at the supreme court is Berlusconi's last recourse legally and a judgement in favour of CIR will allow it to use the money, previously frozen in lieu of a final decision in the case.

Under Italian law, the prosecutor represents the interests of the state in such civil cases and could have theoretically recommended the court rule in favour of Fininvest, which was ordered to pay the money by an appeal court in Milan in 2011.

The sources said, however, that the prosecutor had indicated on Thursday that damages could be cut by up to 15 percent.

CIR said in a statement it welcomed the prosecutor's request because it acknowledged its right to damages, while Fininvest said it had acted properly and caused no damage to CIR.

The case relates to a 1991 verdict in which a Rome court effectively enabled Fininvest to acquire a controlling stake in Mondadori from CIR.

A criminal court in 2007 found Berlusconi's former lawyer Cesare Previti guilty of bribing a judge to rule in favour of Fininvest, but Berlusconi himself was cleared of responsibility.

(Reporting by Sara Rossi and Danilo Masoni; editing by Patrick Graham)

Stocks treated in this article : CIR Group, Arnoldo Mondadori Editore SpA