Italy was reeling in the wake of an announcement that Italian magistrates opened an enquiry into the billionaire prime minister's sex life and his relationship with an underage girl, known as Ruby.
Berlusconi later Tuesday dismissed the allegations as a "media construction" and said he had no intention of resigning. "Are you mad?" he retorted when questioned by journalists.
News of the investigation came just days after a court ruling partially stripped the prime minister of political immunity.
While having sex with prostitutes is not a crime in Italy, having sex with a minor has been punishable with a prison sentence since Berlusconi's right-wing government voted in a law against it in 2006.
On Monday Milan prosecutor's office made public a document with evidence that "a significant number of young girls prostituted themselves with Silvio Berlusconi in his residences in exchange for sums of money".
Influential Roman Catholic daily Avvenire on Tuesday called for Berlusconi to clean up his act.
"Even the idea that the head of state institutions are implicated in stories of prostitution -- and even worse, prostitution of a minor -- is harmful and shocking," Marco Tarquinio wrote in a front-page editorial.
The Vatican has not commented on the affair, nicknamed "Rubygate", but Italian media claimed members of Berlusconi's centre-right government feared losing the Church's blessing.
Sources close to the prime minister were quoted by ANSA news agency as saying "If the Vatican... should ditch us, it would all be over."
Prosecutors have collected wire-taps, leaked to the press, revealing details about sleazy parties held at the prime minister's residence near Milan.
"The accusations are very serious indeed," Franco Pavoncello, political science lecturer at the John Cabot University in Rome told AFP. "Considering the current weakness of the government... it's likely to lead to early elections," he said.
Prosecutors claim to have obtained "ample proof" which would warrant a probe into the addresses which the 74-year-old premier loaned rent-free to the young women who attended his parties.
In wire taps ordered by Milan's prosecutors of conversations between Ruby and friends, the Moroccan, whose real name is Karima El Mahroug, said she had asked Berlusconi for five million euros compensation for having sullied her name.
President Giorgio Napolitano said in a statement Tuesday he was "well aware of the turmoil of public opinion" and hoped the Milan's prosecutor's office would "finish verifying the results of the enquiry as soon as possible".
The leader of the opposition Democratic Party (PD), Pier Luigi Bersani, called on Berlusconi to resign and submit himself to the inquiry.
But Roberto D'Alimonte, lecturer in political sciences at Luiss University in Rome, said the scandal would probably not affect the prime minister's position.
"Silvio Berlusconi is a libertine, the most libertine of all the G8 leaders, but libertinism is not a crime. In Italy it's not even a political consideration, his voters elect him anyway," he said.
Italian media voiced the country's embarrassment.
"If the magistrates don't manage to prove there was a crime, we're still left with the image, with the moral question, for Italy and our credibility abroad," the left-leaning Repubblica daily said.
Media magnate Berlusconi, a notorious womaniser, has previously admitted he is "no saint" but claimed he never paid for sex.
Both he and Ruby, a disco dancer who is now 18, have denied having had sexual relations.
In a video message released Sunday he raged against the "laughable, unfounded accusations", saying he had "had a stable relationship" since splitting up with his wife, Veronica Lario, in 2009.
The mysterious mention of a secret girlfriend sent Italian media into a frenzy, with foreign bookmakers taking bets on her identity according to the Agicos gambling information agency.
The highest odds are on Berlusconi's new companion being a judge, it said.
