Ratings agency would not have issued damaging downgrade if it had taken account of cultural wealth, state auditor claims

Italy is threatening to sue the credit ratings agency Standard & Poor's for failing to value its historical and cultural treasures.

The country that bequeathed the world Dante, da Vinci and an enviable vision of La Dolce Vita, thinks financial analysts would not have issued a damaging credit downgrade against Italy if they had paid more attention to its cultural wealth than its spiralling budget deficit.

According to the Financial Times, Italy's auditor general, the corte dei conti, believes that S&P may have acted illegally and could be sued for €234bn (£194bn).

The paper cites a letter from the corte dei conti notifying S&P that it is considering legal action: "S&P never in its ratings pointed out Italy's history, art or landscape which, as universally recognised, are the basis of its economic strength."

S&P has described the claims as "frivolous and without merit".

The investigation extends to S&P's rivals Moody's and Fitch, with further details expected to be revealed by the corte dei conti on 18 February.

Moody's dismissed the allegations, while a spokesman for Fitch said: "As we understand the prosecutor's concerns, we believe Fitch at all times acted appropriately and in full compliance with the law."

The prosecutor's investigation is likely to focus on S&P's decision to cut Italy's credit rating two notches to BBB+, as part of a sweep of eurozone downgrades in January 2012. Mario Monti, at the time newly installed as Italy's technocratic prime minister, described the downgrade as "a further problem as it makes certain investments impossible". The downgrade confirmed that the epicentre of the financial storm had moved to Italy, and the cost of Italian borrowing soared in the weeks after S&P's decision. S&P said the downgrades were necessary because European leaders were failing to deal with their debt problems, while eurozone leaders accused the agency of not understanding the measures they had agreed to calm the crisis.

The latest Italian case may be the first time the powerful ratings agencies have been accused of culturally illiteracy, but they already faced charges of poor maths and dismal economic forecasting.

When the US saw its creditworthiness downgraded in 2012, the then Treasury secretary Tim Geithner accused the agencies of "a stunning lack of knowledge about basic US fiscal maths". The US government is pursuing a £5m lawsuit against S&P, accusing the agency of defrauding investors by pumping up the ratings of mortgage securities to win more business from large investment banks.

The ratings agencies also stand accused of failing to see the financial storm coming. In 2009 Moody's issued a report titled Investor Fears over Greek Government Liquidity Misplaced – just six months before Athens was forced to seek a bailout.