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By Gavin Jones
ROME, March 18 (Reuters) - Italy's highest appeals court on Tuesday confirmed a two-year ban from public office for centre-right leader and former Prime Minister Silvio Berlusconi over a conviction for tax fraud.
Berlusconi's lawyer Niccolo Ghedini said he was "extremely disappointed" by the ruling of the Court of Cassation, which diminishes Berlusconi's hopes of running as a candidate in elections for the European Parliament in May.
Berlusconi had appealed against the ban handed down by a Milan appeals court last October. He also faces a four-year prison sentence, commuted to one year likely to be spent doing community service, after he was found guilty in August 2013 of masterminding a complex system of tax evasion by his holding company Fininvest.
Berlusconi, whose Forza Italia party is the largest parliamentary opposition to Matteo Renzi's coalition government, has continued to lead his party from outside parliament since he was stripped of his seat as a senator in November.
Berlusconi, who says he will appeal to Italy's constitutional court against the tax fraud verdict, has already appealed to the European Court of Human Rights against his expulsion from the Senate.
In addition to the tax fraud case, he is fighting a seven-year jail sentence issued by a Milan court last year for paying for sex with an underaged prostitute and abusing his office to cover it up.
Berlusconi, a billionaire media tycoon, denies all wrongdoing and has said he is the victim of politically motivated prosecutors and judges.
His allies criticised the latest ruling against him and said there was no doubt he would still spearhead the campaign by Forza Italia - or "Go Italy!" - at the European Parliament elections.
"The Court of Cassation's ruling is abnormal and unjust," said Mariastella Gelmini, a Forza Italia deputy and former education minister, of the high court ruling. "There is an ideological prejudice against Berlusconi that annuls the rights of the defence."
Despite his legal problems, Berlusconi continues to command a solid core of popular support.
Most opinion polls give Forza Italia around 22 percent of the vote, roughly level with Beppe Grillo's anti-establishment 5-Star Movement but trailing Renzi's Democratic Party (PD), which has around 30 percent.
Berlusconi is also a key player in Renzi's attempts to reform Italy's electoral law and political institutions.
Renzi insisted on drawing up the draft reforms currently before parliament with Berlusconi, despite resistance from members of his own PD who said that they gave too much power and influence to the former premier. (Reporting by Gavin Jones; editing by Mark Heinrich and G Crosse)