ROME - PRIME Minister Silvio Berlusconi faces a lawsuit from the owners of the left-leaning La Repubblica daily after he urged entrepreneurs not to advertise in the paper, the group said on Wednesday.

L'Espresso, which also publishes a weekly magazine of the same name, has asked its lawyers 'to take all the necessary steps to protect the company,' it said in a statement.

It said Mr Berlusconi, 72, had attacked La Repubblica in a speech earlier this month to young Italian entrepreneurs, exhorting them not to advertise in what he called a 'subversive' newspaper.

La Repubblica, which has the second largest circulation in Italy after the Corriere della Sera, has extensively chronicled a series of scandals on the flamboyant Mr Berlusconi's private life over the last several weeks.

Notably, the self-made billionaire's unexplained relationship with a teenage aspiring model prompted his already estranged wife to file for divorce.

L'Espresso's share price rose nine per cent on the Milan stock market after the announcement of legal proceedings against Mr Berlusconi.

The premier is nevertheless immune from prosecution while in office - under a law he sponsored soon after returning to office last year.

Mr Berlusconi was quick to react, calling L'Espresso's threat 'ridiculous.' Urging a refurbishment of Italy's image abroad, he alleged 'a campaign (against him) fuelled by hate and envy and that certainly does no good for the country.' -- AFP