ROME A party at Silvio Berlusconi's home, with beautiful girls invited for the prime minister's pleasure -- it could have been this summer's story, but this was 1986.
It was New Year's Eve and Berlusconi, then just a media tycoon, hosted a party for his friend, prime minister Bettino Craxi. A year earlier, Craxi had legalized his host's TV networks by scrapping a state monopoly on national broadcasting in a measure dubbed "the Berlusconi decree."
"Two girls from Drive-In (TV show) should have come and they've stood us up, and Craxi's furious...because it turns out that we won't screw," Berlusconi said in a call taped by police and made public during an anti-mafia trial years later.
Small wonder then that when allegations surfaced this summer that 72-year-old Prime Minister Berlusconi slept with a call girl brought to one of his parties in November by a businessman, many Italians did not seem surprised -- or concerned.
"This is nothing new in Italy," said Maria Grazia, a secondary school teacher. "Here in Rome, we have had Nero, Caligula ... What can surprise us?"
Some Italians voice embarrassment at the scandal. Others shrug it off, accepting Berlusconi's admission he is no saint. Almost no-one has expressed shock such a thing might have occurred in Italy and the episode has barely dented his ratings.
"Berlusconi has one thing going for him in this scandal: the almost limitless cynicism of the Italian people about politicians and the political class," said Alex Stille, author of best-selling books on Italian politics and the mafia.
It doesn't hurt that Berlusconi's stranglehold on Italian TV -- he owns three of the four private channels and holds sway over the three state ones -- has ensured scant coverage of "sexgate" in the country's most popular media.
ITALIANS INURED TO SCANDAL
The reality is that Italians have become inured to seeing leaders beset by scandal.
Craxi fled Italy amid a corruption backlash in 1994, and seven-time premier Giulio Andreotti lost power in the same "Clean Hands" campaign before standing trial over mafia links: after years in court he was finally acquitted on appeal in 2003.
Berlusconi himself has faced 12 legal cases -- on charges including false testimony, bribing police and political party financing -- but has never been convicted, on several occasions because the statute of limitations expired on appeal.
So while the foreign press have fulminated at Berlusconi's fondness for young women, portraying him as a philandering Emperor Nero fiddling as Italy's economy burns, Berlusconi has said they do not understand the real Italy.
Some local observers agree.
"Italy has been the anomaly in Europe for a long time," said James Walston, professor at Rome's American University. "There's disrespect for law in large areas of society. For many Italians, what Berlusconi has done is admirable."
Tax evasion has been described as a national sport -- think-tank Eurispes estimated just over one-third of Italy's 1.5 trillion euro economy is in the 'black', or not paying tax, and the national statistics agency pegs it closer to 16 percent.
Politics and business are intimately intertwined, with personal contacts often crucial in negotiating bureaucracy. Transparency International ranked Italy as the second most corrupt country in the euro zone last year, behind Greece.
While a scandal in Britain over parliamentary expenses this year prompted resignations and helped humiliate the ruling Labour party in European and local elections, a similar investigation in Italy two years ago made little lasting impact.
The bestselling book at the heart of that scandal, "The Caste," revealed that Italy's parliament spends 10 times more on itself than its Spanish equivalent, thanks to countless perks, such as individual tennis lessons for members.
"It's not because the British are more moral, it's because they're more likely to get punished," said Walston. "There's an arrogance on the part of the caste of politicians which runs Italy, who don't think they're answerable to the people."
In Italy, notes Victor Lapuente, an expert on government at Sweden's Gothenburg University, mayors involved in corruption cases are often re-elected -- something that would be unthinkable in many northern European countries, he says.
Berlusconi has other factors in his favor, including a divided and fractious left-wing opposition, which many Italians think is unqualified to run the country. Berlusconi, by contrast, has a reputation for getting things done.
Moreover, his glamorous lifestyle remains aspirational for many Italians, while the Catholic country's tough divorce laws have fostered a public culture more tolerant of infidelity.
For Walston, Berlusconi will not find himself in trouble unless unemployment climbs sharply in coming months or he fails to deliver on ambitious pledges to rebuild after April's earthquake in central Italy.
"If he fails on those scores, he is going to be in trouble and that will be much worse than lying about whether he did or didn't do something with an 18-year-old," said Walston.
(Editing by Sonya Hepinstall)