Silvio Berlusconi is at the centre of a new controversy after claims emerged he had insulted Germany’s Chancellor Angela Merkel.

Silvio Berlusconi, the 74 year-old Italian prime minister is now accused of making insulting comments about Angela Merkel during a telephone conversation with a newspaper editor.

The vulgar remarks referred to sex and Angela Merkel’s physique and were picked up by investigators probing a 500,000 euro blackmail plot against Silvio Berlusconi.

Silvio Berlusconi is accused of making insulting comments about Angela Merkel during a telephone conversation with a newspaper editor

It has been suggested that, in a phone call in early July, Silvio Berlusconi referred to 57-year-old Angela Merkel as “an un****able fat b***”.

Silvio Berlusconi was also taped while branding his own country “s**t” and claimed the judiciary were out to get him during the phone call with Valter Lavitola, which took place in early July.

Fragments of the taped conversation have been circulating in Italian newspapers for days. Though the alleged comment has not been published, it has been posted on a number of websites.

Today the scandal moved to Germany where the Bild newspaper ran the story under the headline “Did Berlusconi insult our Chancellor Merkel?”.

Silvio Berlusconi’ spokesman said they had no comment to make.

Il Giornale, the newspaper owned by Berlusconi family, described the allegation as “gossip”.

This is not the first time when Silvio Berlusconi is accused of insulting the German Chancellor though the previous instances have been relatively trivial.

Two years ago, he kept Angela Merkel waiting at an official summit while he chatted on his mobile telephone.

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In 2008, Silvio Berlusconi “jumped” out at her from behind a statute and showed “peek a boo” when Merkel arrived in Italy for an official visit.

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The taped phone calls are part of an investigation into allegations that Valter Lavitola, businessman Giampaolo Tarantini and his wife Angela Devenuto had blackmailed Silvio Berlusconi.

It is claimed Silvio Berlusconi had paid hush money to all three over allegations about his dealings with escort girls who attended so-called “bunga bunga” parties at his official residences.

Giampaolo Tarantini is accused of bringing the women to events at Palazzo Grazioli in Rome. Prosecutors allege he was paid at least 500,000 euro to tell officials Silvio Berlusconi had no idea that they were escort girls.

One of the women was Patrizia D’Addario who claimed she was paid to spend the night with the Italian prime minister.

Tarantini is also under investigation for supplying cocaine to high-profile clients in parties held on the Italian island of Sardinia – where Silvio Berlusconi has a home.

Ten days ago Berlusconi confirmed he had paid the money but insisted had “merely been helping out someone who was going through a rough time.”

At the beginning of this week Silvio Berlusconi had been due to meet prosecutors to discuss the blackmail but he pulled out at the last minute insisting he had to meet European Union chiefs in Brussels and Strasbourg to reassure them Italy was tackling its financial crisis.

Prosecutors have told him he must present himself at their office in Naples before Sunday at 8pm or they will declare him a hostile witness and call in police to forcibly bring him in for questioning.

Giampaolo Tarantini and Angela Devenuto were arrested earlier this month in their luxury apartment in Rome as part of the probe and they are now in custody. Valter Lavitola is said to be in Brazil.

Silvio Berlusconi, who is not under investigation but considered a victim, is currently involved in four trials. One of the trials is for having sex with an underage prostitute.

It was reported that Silvio Berlusconi have paid Moroccan born belly dancer Karima El Mahroug to spend the night at his villa near Milan when she was just 17 and therefore still a minor under Italian law.

Silvio Berlusconi is also said to have paid 32 other women for sexual favors with cash, jewellery and cars to attend the parties and the trial is set to resume in Milan in October.