* "Crime pays much less than thought" - Transcrime
* Mafia revenues equal 0.7 pct GDP - past study 10.9 pct
* Criminal groups still a challenge, moving north
By Stephen Jewkes
MILAN, Jan 16 Italy's organised crime networks take in around 10.5 billion euros ($13.96 billion) a year, a fraction of previous estimates of their turnover, a government-funded report said on Wednesday.
Mafia revenues amounted to around 0.7 percent of Italy's gross domestic product, the Transcrime research centre said in its paper - much lower than a study by Milan's Bocconi university last year that said criminal activity was responsible for about 10.9 percent.
"Crime pays much less than is thought. We need to debunk the idea that organised crime has a turnover of 10 percent of GDP," Transcrime head Ernesto Savona told a conference on the findings.
Savona did not give reasons for the differences in the figures but said past studies had not given full details of the methods used to make their estimates.
His centre, based at Milan's Cattolica university, had used criminal justice statistics, money laundering and tax evasion data, law enforcement reports and figures on asset seizures, he added.
The mafia still posed a significant challenge, delegates at the conference said, and was moving beyond its southern stronghold to beef up its presence in the north, including Milan's Lombardy region which accounts for about a fifth of Italian GDP.
"A blood sucker goes where the blood is, and the money is here (in Milan)," the deputy head of Italy's police Alessandro Marangoni said on the sidelines of the conference.
The mafia had also taken advantage of Italy's recession, moving in to offer often extortionate loans to businesses struggling to get credit from legitimate but cash-strapped banks.
"With the high cost of lending, the mafia is able to get a foothold in many businesses with its ready liquidity," Marangoni said.
Extortionate lending has become an increasingly sophisticated and lucrative source of income for organised crime, on top of drug trafficking, racketeering, prostitution and counterfeiting, say mafia watchers.
Groups like the Sicilian Cosa Nostra, the Naples Camorra and Calabria's 'Ndrangheta have built strong footholds in the Italian economy with revenues that match those of some of the country's biggest businesses.
"In some areas of the north we're now seeing joint ventures between the 'Ndrangheta and the Camorra," Transcrime researcher Michele Riccardi told Reuters.
The Transcrime report, said mafiosi were far from brilliant businessmen, and criminal organisations focused on the construction, mining and catering sectors, where sophisticated management skills are not needed.
Illegal investments were focused on sectors where technology levels were low, labour-forces and public funding high and foreign competition low, it added.
Another study by anti-crime group SOS Impresa last year said organised crime generated annual turnover of about 140 billion euros, more than 13 times the Transcrime estimate. ($1 = 0.7521 euros) (Reporting By Stephen Jewkes; Editing by Andrew Heavens)