Milan prosecutor won't challenge lifting ban on Berlusconi - sources

MILAN (Reuters) - Italian prosecutors have decided not to challenge a court ruling that lifted a ban on Silvio Berlusconi from holding public office, meaning he can now stand to be prime minister again, judicial sources said on Wednesday.

Berlusconi was convicted of tax fraud in 2013, triggering his expulsion from the upper house of parliament and an automatic bar on holding any elected position for six years.

However, in a decision made public on Saturday, a court in the northern city of Milan, which oversees the application of sentences, ruled that the ban could be lifted a year early because of "good conduct".

After studying the decision, Milan prosecutors, who have led numerous investigations into the billionaire media magnate over the past 25 years, decided not to launch an appeal.

Berlusconi's Forza Italia party performed less well than expected in a March 4 national election -- a weak showing that the veteran leader blamed on the fact that voters knew he was banned from entering parliament or from being prime minister.

But it was not all good news for Berlusconi on the legal front, with a court in Rome ordering that the 81-year-old should stand trial on charges that he bribed a witness in a 2013 under-aged prostitution case, a legal source said.

He denies any wrong-doing.

He has already been told to stand trial in the Tuscan city of Siena in a separate strand of the same case.

The investigation centres on allegations that he paid off a number of people who attended his wild "Bunga Bunga" parties to give false witness at the 2013 trial.

He was originally found guilty of paying to have sex with a minor and sentenced to seven years in jail, but the verdict was overturned in 2014 by an appeals court, which ruled that there was no proof he had known the girl was under age.

Subsequently, prosecutors alleged he paid off a number of witnesses, including, in the Rome strand, musician Mariano Apicella. The alleged payments to various people are being handled in different courts around the country according to the location of the banks that received the money.

(Reporting by Manuela d'Alessandro, writing by Stephen Jewkes and Crispian Balmer; Editing by Hugh Lawson)