Silvio Berlusconi has been formally placed under investigation on suspicion of paying for sex with a 17-year old girl, according to a statement issued today by prosecutors in Milan.

He was further accused of abusing his position as Italy's prime minister by bringing pressure to bear on the police to cover up his alleged relationship with the girl, who was working as a prostitute. The two alleged offences carry sentences totalling 15 years in jail.

The statement said Berlusconi, who has not been charged, had been invited to present himself for questioning. The prosecutors said he had been formally made a suspect on 21 December, but the news only broke today on the website of the Italian daily Corriere della Sera.

Berlusconi's legal team said today the investigation was "absurd and groundless" and the allegations raised had already been denied by the main figures in the case. They called the inquiry a "very serious interference in the private life" of the prime minister.

The reported investigation concerns Karima el-Mahroug, otherwise known as Ruby Rubacuori or Ruby Heartstealer, a then 17-year-old Moroccan girl who told investigators last year that she had attended parties at Berlusconi's villa near Milan. One of these, she was reported to have said, ended in an erotic game known to participants as "bunga bunga".

The case came to light after Mahroug, first named in some reports as Karima Keyek, was arrested last May on suspicion of theft. She had run away from a care home, but instead of being returned to care she was handed over to a confidante of the prime minister, Nicole Minetti.

A half-British former showgirl, Minetti became Berlusconi's dental hygienist and, soon afterwards, a regional parliamentarian for his Freedom People movement. Corriere said police raided her office in Milan this morning.

Minetti is already under investigation for aiding and abetting prostitution, along with two other close associates of the prime minister, a newscaster on one of his three television channels and a showbusiness talent scout. Corriere reported that the police attempted to search the office of another Berlusconi confidante, but withdrew after it was claimed that the premises were covered by parliamentary immunity.

The age of sexual consent under Italian law is 14, but paying for sex with a prostitute under 18 is an offence that carries a sentence of up to three years. Politicians and others found guilt of abusing their position risk jail sentences of up to 12 years.

Berlusconi, who spent part of this morning meeting with his lawyers, gave no immediate reaction, but his education minister, Mariastella Gelmini, said the prime minister was the "object of persecution by certain prosecution services".