Mr Berlusconi told viewers of a regional television station, Telelombardia, how as a boy during the second world war he had collected waste paper in the street, and compressed it into balls that could then be resold to people who used it to light their stoves. He also reminisced about scraping together cash by helping out in a local market. Warming to the theme of salvation through self-help, he said: "When someone gave me a camera, I used it to take pictures at funerals [and] weddings. And I took portraits."

Paul Ginsborg, the historian and author of Silvio Berlusconi: Television, Power and Patrimony, said the prime minister was entitled to claim he had pulled himself up by his boot straps: "His father was the only clerk in a little bank and he certainly had tremendous difficulty finding capital in the early part of his career. He didn't come from a wealthy background, unlike Rupert Murdoch who really was born with a silver spoon in his mouth."

Mr Berlusconi has in the past described how he took fees for doing the homework of richer boys at his school in Milan. He famously worked himself through university, working at various times as a vacuum cleaner salesman and a cruise ship crooner.

With Italian output stagnant, the economy is seen as the weak point of its entrepreneur leader. But the prime minister has met hostile questioning with confident assurances that everything is going a lot better than people think.

Asked on Monday night about figures showing rising household debt, Mr Berlusconi said this just proved "the faith that families have in their own futures. It means the Italians don't think they will have problems in the future paying off debts such as a mortgage for a house."

A statement from Italy's biggest opposition party, the formerly communist Democratic Left, began by noting that the prime minister had made his comments "without blushing". It said the real scorecard after five years of government by the right was "Growth, zero; budget deficit, 4.1% [of GDP], and inflation in goods and services of between nine and 35%."

After five years in which Italy has consistently performed worse than its European partners, the economy was expected to be at centre of the election campaign. But Mr Berlusconi has succeeded in diverting the voters' attention towards other controversies.

The most recent blew up after it was revealed that the pope was to meet him in the Vatican shortly before polling day. After an outcry from the opposition, Mr Berlusconi announced late on Monday that he would not be going after all.

The right is trailing by between four and five percentage points in the opinion polls. But Prof Ginsborg said his opponents would be unwise to write him off precisely because Mr Berlusconi had pulled himself up by his boot straps. "In order to understand him, you have to see that he is quite a fighter," he said.

Fastow, in a nervous but steady voice, spent most of his first six hours on the stand describing quid pro quo deals he arranged with Jeffrey K. Skilling, then Enron's chief executive. He said Skilling was so obsessed with making the company look good for Wall Street that Skilling approved of sham deals that helped the company meet its earnings targets while Fastow, then chief financial officer, personally skimmed millions of dollars off the transactions.

Near the end of the day's testimony, Fastow began talking about when former chairman Kenneth L. Lay took over the chief executive reins, a time when Fastow said "the foundation was crumbling" but Lay continued to make positive public statements about the company's prospects.

Fastow, who carefully exited the courtroom by walking past the jury instead of down the center aisle where he would have had to pass his former bosses, will continue his testimony Wednesday. Skilling and Lay face years in prison if they are convicted on multiple fraud charges in this trial. The defense lawyers have labeled Fastow a thief and a liar and have prepared a blistering cross-examination strategy designed to undermine Fastow's credibility.

Tuesday's testimony marked the first time Fastow has spoken publicly about his role in Enron's collapse, bluntly acknowledging that he got rich off of the maneuvering in the corporate suites. "I was going to scratch their back, and they were going to scratch mine," said Fastow. "I thought I was being a hero for Enron. The stock price goes up, I get a bigger bonus -- what I thought was a win-win situation."

Fastow's testimony was rich with details of meetings he had with Skilling in which the two plotted strategy, with Skilling once asking, "Can we trust her?" when Fastow described someone he was going to bring into a bogus deal. But Fastow said Skilling may never have seen a handwritten memo in which Fastow documented some of the deals; instead, Fastow directed that to Richard A. Causey, then Enron's chief accounting officer, who has already pleaded guilty.

"The whole point was these were the undocumented deals, these were the side deals," Fastow said. "It wasn't a good document to have hanging around."

Fastow said he destroyed that original document but placed a copy in a safety-deposit box along with his employment contract. He said that he was afraid of losing count of the sham deals -- and that he willingly went along with the schemes because, for him personally, "it was pretty much pure upside."

Fastow collected more than $45 million from secret partnerships set up to do deals with Enron. He forfeited nearly $24 million of that as part of a plea agreement that binds him to serve a 10-year prison term. Unlike several other cooperating witnesses, Fastow will not receive leniency from the government in the form of a reduced sentence -- a fact prosecutors drove home to the jury.

Fastow, who wore a gray suit, white shirt and gray tie, carefully avoided eye contact with either Skilling or Lay. Skilling listened intently to the testimony, pressing a pen to his mouth and sometimes exchanging words with his attorney. Lay jotted comments on a yellow legal pad. Three of Fastow's lawyers sat in the front row, beside his brother, Peter. The eight-woman, four-man jury appeared attentive through the long day and often took notes.

A former wonder boy who has since gone gray, Fastow lost his composure only when asked to describe why he was cooperating with the government. He said he accepted the plea deal for the good of his wife and two young sons. He faltered and broke into tears when he was asked about a guilty plea entered by his wife, Lea W. Fastow, who served a one-year prison term for filing a false tax return. His face reddened and he waited several beats before answering, then blamed himself for his wife's ordeal.

Fastow devised many of the structures whose disclosure helped plummet Enron into bankruptcy protection in December 2001. He was, he testified, the wizard behind Enron's "perpetual motion machine," a cycle that hid debt, inflated earnings, and kept stock prices and executive bonuses spinning upward. He also had direct contact with both Lay and Skilling, making him an important player in the government case.

But he is also prosecutors' most personally tainted witness, a man who admitted to stealing and involving his wife in fraud and who described himself Tuesday as sometimes "obnoxious" and "opportunistic."

Fastow's description of himself as a "hero" prepared to jump in and "bail out" Enron so long as the deal carried benefits for him is likely to be thrown back at him by Skilling's and Lay's lawyers. The defense also is likely to attack Fastow as a liar, trying to discredit his account of several meetings with Skilling.

In one story Tuesday, Fastow related how he told Skilling that a Brazilian power plant the executive wanted him to buy was worthless.

Skilling replied, according to the witness: "Don't worry. I'll make sure you're all right. You won't lose any money on the project."

Later, Fastow talked about another deal in which his partnerships temporarily purchased a wind farm from Enron. Fastow and his business partner, Michael J. Kopper, transferred the assets to Kopper's domestic partner, William D. Dodson, avoiding disclosure that would have been required if the men had been legally married. The ruse amused Skilling, Fastow said.

"He got a little laugh, that there was this hole, hole if you will, in the law."

Prosecutor John C. Hueston highlighted calendar entries for Fastow, Causey and then-treasurer Ben F. Glisan Jr. reflecting meetings about their agreement that Fastow would never lose money in his dealings with Enron. But Skilling's calendar entries were not produced by the government to corroborate Fastow's story.

Fastow said the partnerships themselves were legal and in many cases approved by the company's board. The defense is likely to highlight those approvals and to argue that Fastow's abuse of the partnerships was the only illegal conduct at Enron. But Fastow hastened to add that he and others hid key facts from the board and from investors, hoping to cover up the company's problems.

"At Enron, the culture was, the business practice seemed to consistently be, to do transactions that maximized the financial reporting as opposed to maximized the true economic value," he said.

Representatives from both the ruling UMP party and the opposition benches had already voted to adopt the download fee idea in December while debating an original version of the bill.

As a result, Villepin hastily withdrew the original bill and had it slightly modified for re-submission to parliament Tuesday.

Several days of debate are scheduled before a vote due on March 14.

If the downloading fee becomes law, France would join a small number of Western countries -- among them Canada and the Netherlands -- which allow consumers to legally make copies of copyrighted digital files for private use.

Many other countries, most notably the United States, take an opposing view and have passed legislation expressly outlawing the practice.

On Monday, in a sign of the government's determination to quash the fee idea, Villepin's administration withdrew the article in the bill to which was attached the two amendments that would have legalised downloads.

The parliamentary leader of the opposition Socialists, Jean-Marc Ayrault, said the government's strong-arm tactics reeked of "panic".

The French government -- which is trying to bring its copyright laws into line with a 2001 EU directive -- modified the fines stipulated in its bill after December's vote.

The fine for a first-time offender downloading tunes or a film was reduced to 38 euros, with higher penalties for those who broke copyright protection on a commercial DVD or who made public "hacks" to get around protections.

Other articles in the bill provide for the establishment of a government body that would decide how many private copies of a digital work an individual can make and what copyright exceptions should exist for libraries, journalists and handicapped people.

Big music companies and a few famous French singers, veteran rocker Johnny Hallyday among them, are hostile to a download licence for Internet users -- expected to amount to, say, eight or 12 euros -- saying it would not nearly compensate them for the royalties they earn from more traditional music sales.

But French consumer groups -- and quite a few MPs -- counter that the Internet age has changed consumer habits, and an estimated eight to 10 million French people, out of a population of 60 million, download files anyway.

A new economic model is needed, they argue, and a download fee would provide money to artists who lose out entirely under current practices.

"The government bill is wrong to attack the private exchanges between consumers and to aim to create by decree new fines," one consumer group, UFC-Que Choisir, said in a statement.

"It is also wrong to submit the private use of works bought by consumers to a unilateral control by companies that wipes out the notion and spirit of private-use copying" up to now enshrined in French law, it added.

Both sides of the debate have acknowledged that platforms such as Apple's Music Store do provide legal downloads on a pay-per-file basis.

But they also note that such files are not always playable on a variety of machines (for instance Apple music files will only play on iPods), limiting their appeal -- and possibly even breaching French anti-competition law.

Meanwhile the CBI, the UK's largest employers' group, said consumer services companies saw the value and volume of the business fall over the latest three months.

This drop was in stark contrast to a surge in business for professional services firms to its strongest levels since its survey began in November 1998. It echoes official figures showing that sectors such as business and financial services were behind the acceleration in GDP in the final quarter of last year.

Ian McCafferty, the CBI's chief economic adviser, said: "The increasing divergence we are seeing in the services sector comes as no surprise. Higher household bills are now making their impact well and truly felt on those companies offering leisure and entertainment services. On the other hand, business services are more resilient and benefiting from the buoyant global activity."

Its survey showed the number of consumer-facing firms reporting a fall in business outnumbered those seeing a rise by 17 per cent. Profitability suffered its largest fall since August 2003, optimism dropped to a three-year low, and companies cut staff numbers for the second quarter in a row.

The survey comes a day after GfK, the market research company, said sales of consumer durables suffered their first fall for at least a decade in February.

Mark Thornton, a partner at Grant Thornton, the accountancy firm that sponsors the CBI survey, said it was no longer just "big ticket" goods that were suffering.

Nationwide said bad news on jobs and retail sales, plus rising fuel and energy prices, had conspired to undermine consumers' confidence. Its index fell four points to 94 in February, close to a survey low of 92.

Stuart Bernau, its executive director, said the prospect of weakening consumer spending "presented a challenge" to the Bank of England, whose Monetary Policy Committee meets today and tomorrow, and Gordon Brown, who is putting the final touches to his March Budget.

There was fresh gloom from a survey by the retail analysts FootFall, showing the number of visitors to UK shopping centres fell 0.2 per cent in the final week of February to take the annual decline to 8 per cent.

Why are workers so ebullient? A growing number believe that their own firms are on the verge of expanding payrolls, which is always a good sign for the economy.

According to the Hudson index, 33 percent of workers believe their firms are ready to hire more staff. This represents the highest share of workers reflecting that belief since October 2004.

But it's not just the rank and file. Even among managers at private-sector firms, 45 percent now believe their employers are ready to start hiring again, up from 38 percent who thought so in January. "On the heels of a conservative start to the year, managers are feeling more comfortable putting their 2006 hiring plans in gear," says Steve Wolfe, an executive vice president for Hudson's North American operations.

"This news," he added, "along with a strong [gross domestic product], lower unemployment rates, and the growing demand for skilled labor in certain sectors such as healthcare, financial services, and [information technology], are strong indications that the economy is growing steadily."

A couple of days from now, Wall Street will get a snapshot of the employment situation when the Labor Department is scheduled to release its much-anticipated February jobs report. That report, due out on Friday morning, will reveal how many new jobs were created and update the nation's unemployment rate.

The convention centre was built in the memory of Jacob Javitz, a firm supporter of Israel who was a senator for more than 20 years. "It carries the name of someone whose legacy is contrary to such views," said Malcolm Hoenlein, of the Conference of Major Jewish Organisations.

Lord Rogers cut ties to the group last week. "I have never backed a boycott and I have never stated that I favour targeted activities," he said.

One of Britain's leading architects, Richard Rogers, is battling to save his $1.7bn (£971m) redesign of a New York convention centre, after his connections to a pro-Palestinian protest group outraged politicians and Jewish organisations.

Lord Rogers, the architect behind the Welsh Assembly building and the Millennium Dome, was summoned to meet the chairman of the Empire State Development Corporation yesterday. The company wants him to explain his involvement in Architects and Planners for Justice in Palestine, revealed in The Independent last month.

He hosted a meeting of the group at his London headquarters, at which architects considered calling for a boycott of Israel's construction industry in protest at the building of the separation barrier in the Occupied Territories.

The convention centre was built in the memory of Jacob Javitz, a firm supporter of Israel who was a senator for more than 20 years. "It carries the name of someone whose legacy is contrary to such views," said Malcolm Hoenlein, of the Conference of Major Jewish Organisations.

Lord Rogers cut ties to the group last week. "I have never backed a boycott and I have never stated that I favour targeted activities," he said.

Mr. Ereli said the talks on the boycott were part of a larger drive to nail down a bilateral free-trade agreement with the UAE.

But U.S. lawmakers said the country's participation in the Arab League boycott raises fresh questions about the deal to allow UAE-owned DP World to purchase the management contracts for New York, Baltimore and other major U.S. ports.

"Obviously, it should be a factor" in whether to approve the deal, said Sen. Charles E. Schumer, New York Democrat, who has helped rally bipartisan opposition to the Dubai deal in Congress.

"Security has to come No. 1, but [the boycott's] something that has to be weighed," he said.

Sen. Frank R. Lautenberg, New Jersey Democrat, added, "I don't like the fact the UAE is a party -- whether directly or indirectly -- to a boycott, which is illegal under all kinds of international agreements, against Israel, and that it is still sticking by that."

Leading U.S. Jewish groups have long sought to end the boycott.

The boycott "is an anachronistic practice that has been used by the Arab world to unfairly isolate and stigmatize Israel," said Josh Block, a spokesman for the influential American Israel Public Affairs Committee. "No company should be participating in the boycott."

Abraham Foxman, director of the Anti-Defamation League, wrote in a Feb. 28 letter to Treasury Secretary John W. Snow, "If Dubai continues its anti-Israel activity, it must be grounds for the cancellation of the deal."

It has been illegal since 1977 for U.S. companies to comply with the boycott, either by agreeing not to do business with Israel or by certifying that their products do not contain any Israeli materials. Companies are also required to report any requests for such restrictions to the Commerce Department.