Italy's Supreme Court has upheld the four-year prison sentence given to former prime minister Silvio Berlusconi for tax fraud and he is likely to be given house arrest or community service.

Berlusconi has faced well over 20 trials since entering politics in 1994, on charges ranging from false accounting to having sex with an under-aged prostitute and this marks the first time the billionaire politician has definitely been convicted of a crime. In most previous cases he has been acquitted or seen charges dropped due to statute of limitations.

The tax fraud charges related claims that in 2002 and 2003, Berlusconi's company Mediaset, Italy's dominant private television broadcaster, bought US film and television rights at inflated prices, allowing the company to fraudulently lower its tax bill. Mediaset itself was not and Berlusconi has repeatedly denied the charges, saying he didn't take part in talks over TV rights. His lawyers also argued that the sums claimed - about €7m (£6m) were too small to interest the billionaire.

In an emotional televised address Berlusconi, who has served as premier on three occasions, said that 'Twenty years of service to my country has been rewarded with a groundless sentence that deprives me of my personal freedom and political rights.'

The 76-year-old is unlikely to go to jail as a result of the verdict because most convicted felons in Italy over the age of 70 are given house arrest or community service. The court has also delayed the imposition of a five-year ban on Berlusconi holding political office which has been sent back to a lower court to rule on its duration.

That decision could take months, during which Berlusconi can retain his Senate seat. In turn, a ban would only become effective after the Senate holds a formal vote on his ejection.

The court ruling is likely to produce deep divisions within the Italian parliament and undermine prime minister Enrico Letta's government.