A massive case of illegal wiretapping and illicit data gathering is sending shivers across Italy, with politicians warning that the suspects represented a threat to democracy and were ready to "blackmail the country."

Reacting swiftly, Premier Romano Prodi's government on Friday cracked down on illegal wiretapping, approving a decree that includes stiff fines for those who make public the contents of the illegally monitored conversations.

"We must defeat whoever attacks freedoms and constitutional guarantees," Justice Minister Clemente Mastella told reporters.

The probe into the alleged spy ring — the latest case in a nation that has a history of wiretapping scandals — continued Friday with the questioning of key suspects behind bars.

CountryWatch: Italy

Emanuele Cipriani, head of a private investigation agency in Florence, was questioned by prosecutors in a Milan prison. Former Telecom Italia chief of security Giuliano Tavaroli, who allegedly heads the ring, was to be questioned later in the day.

The two were apprehended this week as part of a sweep that led to the arrest of 20 people, including police officials.

The decree passed by the government at a Cabinet meeting makes it a crime to possess material obtained through illegal wiretapping. It also specifies that any conversations overheard through illegal wiretapping cannot be used by prosecutors or investigators.

The decree establishes fines ranging from euro20,000 (US$25,000) to euro1 million (more than US$1.25 million) for those broadcasting or publishing illegally obtained conversations, state television said.

Parliament must convert the decree into legislation within a few months or the measure will expire, although the decree will be in effect in the meantime.

The probe is not related to recently announced restructuring plans at Telecom Italia, which led to a clash with the government, but casts a shadow over Italy's largest phone company.

The suspects were accused of spying on a wide range of personalities, tapping their phones, gathering bank and legal records and other sensitive data. However, it was not clear why they were gathering the information.

Names of those under surveillance leaked to Italian newspapers included high-level politicians, businessmen and journalists. Milan daily Il Giornale on Friday published what it said was a list of citizens who had been spied on.

"They wanted to blackmail the country," said Piero Fassino, a leading politician in the ruling center-left coalition.

Justice Minister Clemente Mastella — who has opened an investigation to determine whether ministry officials were involved in the case — spoke of an "attack on democracy."

Telecom Italia has not offered comments on the probe. Cipriani's lawyer, Vinicio Nardo, said Friday that "democracy is not in danger."

Italy is believed to be the European country where wiretapping is most widely used.

Virtually all scandals in past years — from the "Clean Hands" investigations to the recent match-fixing allegations in soccer to the corruption case involving the son of Italy's last king — have involved wiretapping. Transcripts are invariably printed in the Italian press.

This has led to widespread calls for limiting the magistrates' use of wiretapping as well as newspapers' right to print the transcripts.

However, in this case, the wiretapping was not ordered by magistrates conducting a probe but by what investigators describe as a ring whose motives were still unclear.

Premier Romano Prodi has not made any public comments on the case.

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But he has been involved in the other, unrelated controversy over restructuring at Telecom.

Telecom's reorganization plan includes separating the mobile phone unit, TIM, and fixed-line operation into separate companies — a move many saw as paving the way for the sale of the mobile operations.

The plan led to a clash between the company's management and the government, which was accused of interfering with private business. Marco Tronchetti Provera resigned last week as Telecom Italia chairman, and an economic aide to Prodi resigned earlier this week.

Bowing to opposition demands, Prodi has agreed to address parliament next week over the case.