Antonio Fazio, governor of the Bank of Italy, was questioned for almost five hours yesterday by prosecutors who are investigating him for suspected abuse of office in a bank takeover battle.

Mr Fazio made no public comment after leaving a Rome courthouse, but his lawyer took the unusual step of e-mailing to news agencies answers the governor gave during the interrogation.

It was the first time that Mr Fazio had met the prosecutors since they disclosed in late September that they had placed him under investigation on August 1st.

Mr Fazio has ignored appeals for his resignation from Silvio Berlusconi, the Italian prime minister, and other politicians, businessmen and former regulators who contend that the affair has damaged the reputation of Italy's financial system.

The case turns on Mr Fazio's decision to approve a bid for Banca Antonveneta by Banca Popolare Italiana, a bank run by Gianpiero Fiorani, a Fazio family friend, in preference to a rival bid by ABN Amro of the Netherlands.

Investigative magistrates have taped numerous conversations between Mr Fazio and Mr Fiorani, and between Mr Fazio's wife and the bank executive, which critics say demonstrate bias against ABN Amro.

Magistrates in Milan yesterday spent more than six hours questioning Mr Fiorani, who resigned last month as BPI's chief executive and is also under investigation. Mr Fazio has not been charged with an offence, and he maintains his conduct has been impeccable. If the prosecutors were to take the momentous step of asking to put him on trial, their request would need approval from a judge.

Mr Fazio has won solid support from the Bank of Italy's board of directors, whose members are hand-picked by Mr Fazio and which is the only organisation with the authority to remove him. - (Financial Times service)