Silvio Berlusconi's government was today engaged in a vigorous damage limitation exercise after Pope Benedict appeared to lend his immense moral authority to speculation that Italy was in danger of returning to fascism under the tycoon's hardline, rightwing leadership.

In his customary midday Sunday address, the pontiff expressed concern at "recent examples of racism" and reminded Catholics it was their duty to steer others in society away from "racism, intolerance and [the] exclusion [of others]".

On any other day, his remarks might have been seen as no more than a restatement of official Catholic doctrine. But they came instead in the midst of a furious dispute over an editorial published by Italy's bestselling Catholic weekly, Famiglia Cristiana.

In an editorial on Friday, condemning recent government moves against immigrants and Roma, the magazine said it was to be hoped fascism was not "resurfacing in our country under another guise". The jibe outraged Berlusconi's supporters, many of whom are themselves pious Catholics.

The leader of his parliamentary group in the upper house, Maurizio Gasparri, announced he would personally sue the priest who is Famiglia Cristiana's editor while the junior minister with responsibility for family affairs, Carlo Giovanardi, said the magazine was "possessed by ideological malice".

In an effort to calm the row, the Vatican's spokesman put out a statement stressing that Famiglia Cristiana was not authorised to speak on behalf of either the Holy See or the Italian bishops' conference - something which, as the magazine's editor noted, it had never anyway claimed to do.

Coming against this background, the pope's comments were interpreted by Berlusconi's critics as a signal that the Vatican was not climbing down or distancing itself from Famiglia Cristiana's interpretation.

Benedict cited in his address the story from Matthew's gospel of Jesus's encounter with a pagan woman and how he rose above his initial misgivings to perform a miracle for her daughter.

The pope said: "One of humanity's great conquests is indeed the overcoming of racism. Unfortunately, however, there are new and worrying examples of this in various countries, often linked to social and economic problems that nonetheless can never justify contempt or racial discrimination."

Berlusconi's family minister, Giovanardi, denied Benedict's words were aimed at the government. "The pope has a global perspective", he said. "He wasn't talking about Italy."

Famiglia Cristiana's editor, Father Antonio Sciortino, agreed that the pope "was certainly speaking to the whole world". But he added: "And therefore also to Italy where, sorry to say, there are many signs of racism that trouble us and which cannot be hidden."

Urged on by his allies in the anti-immigrant Northern League, Berlusconi has ordered a crackdown on crime, and the illegal immigrants his government says is responsible for a disproportionate share of it.

Earlier this month, the Berlusconi government ordered troops onto the streets to combat an alleged crime wave it blames largely on illegal immigrants and Roma. Interior ministry figures show that more than a third of the arrests carried out by police last year were of non-Italians.

Illegal immigration has been made an offence; mayors have been given new security powers, and deportations have been stepped up.

So far, church leaders have been far more outspoken in their criticism of the government's policies than Italy's main, centre-left opposition party. Earlier this month, they succeeded in blocking an attempt by the mayor of Rome to pass a measure - seemingly aimed at Gypsies - that banned people from rummaging in garbage containers.

In June, Famiglia Cristiana said a government plan to take the fingerprints of Roma children was "indecent".