Former PM says conviction for tax fraud is 'founded on absolutely nothing' and inveighs against 'uncontrolled' judiciary

Silvio Berlusconi, Italy's longest-serving postwar prime minister, has railed against the country's "uncontrollable and uncontrolled" judiciary and accused them of persecuting him with a "fury that has no equal anywhere in the civilised world" hours after being handed his first definitive criminal conviction in more than two decades of legal battles.

In a defiant video message broadcast on one of his own private television channels, the billionaire centre-right leader denied having committed the tax fraud of which he was convicted and for which he was sentenced to a four-year jail term by Italy's supreme court. "No false invoice exists in the history of [Berlusconi's television empire] Mediaset," he said.

In the wake of the landmark verdict, which threatened to plunge the eurozone's third-largest economy back into political instability, he said: "In return for all this, in return for the commitment that I have lavished on my country in the course of almost 20 years, now almost at the end of my working life, I receive as a reward accusations and a sentence founded on absolutely nothing which deprives me of my personal freedom and my political rights."

As Italian politics reeled from the decision of the five judges at the court of cassation, Giorgio Napolitano, the 88-year-old president, and Enrico Letta, the centre-left prime minister in charge of a fragile coalition with Berlusconi's Freedom People (PdL) party, pleaded for calm to prevail.

After more than seven hours of closed-door deliberations, the judges dismissed Berlusconi's final appeal against his convictions for the fraudulent purchase of broadcasting rights by Mediaset, ordering him to serve a jail sentence that had already been cut to one year according to a 2006 amnesty.

Owing to Berlusconi's age – he will be 77 in September – it will not be served in prison but through house arrest or community service.

The only element of the verdict which prevented it from being an unmitigated disaster for the three-times prime minister was the judges' decision to order another court to determine the length of his ban from public office. Prosecutors this week had argued that the ban, which their lower court equivalents had fixed at five years, should be cut to three.

Had the ban been upheld, it would have stymied Berlusconi's immediate political ambitions. As it is, he will be able to continue as a senator in Italy's upper house of parliament and leader of his party – although he made clear in his video message on Thursday night that that party would not be the PdL but a revamped Forza Italia, the party named after a football chant with which he entered politics in 1994.

Even as Letta appealed in a statement for "a climate of serenity", the huge pressure that the conviction will place on his government was starting to show.

Government under secretary Michaela Biancofiore, a member of the PdL, was reported to have said she would be resigning in protest at the verdict. Luca d'Alessandro, a PdL MP and secretary of the lower house of parliament's justice commission, said: "This country was famous for being the cradle of the law. Today it has become its tomb run by a corporation of grave diggers in gowns who have carried out the perfect crime. Honour and solidarity with Silvio Berlusconi, who is certainly more innocent and clean than those who unjustly convicted him."

But the verdict was thought likely to prompt equally strong reactions within Letta's centre-left Democratic Party (PD), many of whose members were already squeamish about joining forces with their political bête noire and may draw the line at continuing in a coalition with a convicted criminal.

Immediately after the verdict, Nichi Vendola, head of the opposition Left Ecology Freedom party, said it was "not possible" for the coalition to continue.

"Faced with this conviction I think it is necessary to bear the consequences: it is not possible to imagine that the PD can remain an ally of Silvio Berlusconi's party. It is not possible to imagine that Silvio Berlusconi can remain at the centre of the political scene. I think that big changes are necessary to give a moral response to the country."

Beppe Grillo, the figurehead of the anti-establishment Five Star Movement, declared on his blog: "The verdict is like the fall of the Berlin wall in 1989."

Berlusconi's lawyers were led by Franco Coppi, a lawyer specialised in cassation appeals who successfully defended former prime minister Giulio Andreotti against charges of mafia ties. After the verdict they issued a statement saying they were evaluating all their options "even at the European level so that this unjust sentence is radically changed".

Until Thursday night not a single one of Berlusconi's many court cases had ended in his definitive conviction. Several lower grade convictions were either thrown out, overturned on appeal or timed out owing to their statute of limitations.

On Wednesday, his defence lawyers had argued that he should be acquitted because his political commitments meant he was not actively involved in the company. They also argued that the crime of which he was accused was not technically a penal offence.

But prosecutors, supporting the verdicts of two lower courts which convicted Berlusconi in October last year and again in May, said Berlusconi's control over Mediaset was "ongoing" at the time, and he was "the mind" behind the system of tax fraud.

Berlusconi was not present at the court but spent the day at his Rome residence, Palazzo Grazioli, reportedly with two of his children, his closest advisers, lawyers and girlfriend Francesca Pascale.

It is not only with the court decision on his public office ban that his legal battles will continue. In June he was given a lower-grade conviction and sentenced to seven years in jail and a lifetime ban on public office for paying for sex with an underage prostitute and abusing his office to cover it up. He is appealing against the verdict – and, even if that appeal fails, he will be allowed a second.

He is also appealing against a conviction for publishing the transcript of a leaked wiretap in his family newspaper, Il Giornale, for which he was ordered to serve a one-year jail sentence. In October, meanwhile, a court is due to rule on whether he should be tried for allegedly bribing a senator to switch political sides. He denies the allegations.