Under Fire, Berlusconi Drops Detention Decree : Italy: Order limiting arrests in corruption cases sparked uproar. Crisis had threatened government.

Bowing to public outrage and the likely collapse of his young coalition government, Italian Prime Minister Silvio Berlusconi scrapped a controversial decree Tuesday that would have limited magistrates’ powers of arrest in corruption cases.

Withdrawal of the decree represented a humiliating defeat for the billionaire media tycoon and political rookie, who was elected in March by an electorate in open rebellion against massive institutional corruption.

Berlusconi said the decree, issued last week, was intended to protect the civil rights of criminal suspects by ending pretrial detention for most white-collar crimes. Critics called it a bald attempt to short-circuit the work of magistrates investigating corruption and the Mafia.

Opposition had mushroomed to encompass not only corruption-investigating magistrates who are some of the most respected public figures in the country but also Berlusconi’s own coalition partners, thus seriously threatening his government’s stability.

On Tuesday, Berlusconi backed away from a showdown he clearly would have lost and called a Cabinet meeting.

Cabinet spokesman Giuliano Ferrara said the government agreed to withdraw the decree and resubmit the proposal as a bill for parliamentary approval.

Ferrara, who has Cabinet rank, said that ministers agreed major cases of bribery and corruption should be restored to a list of offenses for which suspects could be remanded in custody.

Berlusconi’s two main coalition partners, Umberto Bossi of the Northern League and Gianfranco Fini of the National Alliance, opposed the decree and asked Berlusconi to scrap it in a letter made public Tuesday.

“The measure met with vast opposition in the country and the Parliament, with the result of a clear-cut division in the government majority,” they said.

Magistrates, who have used pretrial detention extensively against corruption and Mafia suspects, were among the strongest critics. A 30-month investigation into institutionalized corruption has netted more than 3,000 political and business figures; companies routinely paid kickbacks to individuals and political parties in exchange for government contracts.

The decree would have banned magistrates from using pretrial prison custody for suspects in about 30 types of crimes, among them offenses in public administration, more commonly known as bribery and corruption.

The most dramatic reaction came from the judges themselves, chief of them Antonio di Pietro, the Milanese investigating magistrate who led the justice campaign against institutionalized corruption and rivals the Pope in the esteem in which he is held among Italians.

Di Pietro and other magistrates discovered early on that a few days in cells with “common criminals” was the quickest, surest way of enticing confessions from business people and politicians. On Friday, an outraged Di Pietro said he was resigning as the leading Tangentopoli (Kickback City) judge and asked for a transfer in protest of the decree.

Another threatened resignation came from Interior Minister Roberto Maroni, who claimed he was “misled” about the true content of the decree, written by Justice Minister Alfredo Biondi.

As a quick result of the decree, scores of high-level politicians and business leaders were freed from jail and remanded to house arrest--124 of them, according to Italian newspapers.

Speaking Monday on one of the three national television channels he owns, Berlusconi denied there was a threat the outcry could topple his government. But for the first time, his voice agitated and hoarse, Berlusconi did not rule out a compromise, saying he was “open to improvements” on the decree, from coalition members or the opposition.

Italians tend to see pretrial detention as an aid to speedy justice in a country where cases typically drag on for years, and his opponents accused Berlusconi of acting to support business allies and disgraced old-line political parties and their scandal-tarnished leaders.