Italy's former prime minister Silvio Berlusconi denied at his trial on Friday that he hosted raunchy parties, had sex with a 17-year-old prostitute and abused his powers by pressuring police.

Berlusconi is accused of paying for sex with Moroccan exotic dancer Karima El-Mahroug, better known by her stage name as "Ruby the Heart Stealer".

He is also charged with abusing his position as prime minister by telling police to release her when she was arrested for petty theft in May 2010.

"I never had an intimate relationship of any kind with her," the 76-year-old told the court in only his second appearance at the trial in Milan which began last year and has heard from witnesses describing lavish soirees at his home.

"I was sure she was 24, as she herself said," said Berlusconi, who has kept a relatively low public profile since stepping down in November 2011 after dominating Italy's political scene for much of the past two decades.

When he was told by an aide that El-Mahroug was underage, Berlusconi said: "I was shocked because I understood that she had built up a second identity."

"I can exclude with absolute certainty that there were ever scenes of a sexual nature," he said, referring to parties held at his villa near Milan.

"Everything happened in front of the staff and at times my children too came in to say hello," said the billionaire, who has five children from two marriages which ended in divorce and often boasts of his playboy qualities.

A report in the Corriere della Sera daily said that the trial was "making him anxious, losing him sleep and spoiling his days."

"He considers this a real persecution against him... and knows that it could really damage forever his image as a statesman," the report said.

The "Bunga Bunga" -- described by many of his female guests as a type of lap dance that Berlusconi enjoyed -- was "only a joke I used to tell which then got picked up by the press," he told the court's three female judges.

One witness earlier in the trial said she saw girls in nun costumes stripping for Berlusconi, another testified that she dressed up as late US soul singer Whitney Houston and US President Barack Obama before stripping off.

Several witnesses called by the prosecution said attendees were paid to attend the parties and given a bonus for having sex with Berlusconi.

But the former premier said these descriptions constituted "defamation".

"There has been a lot of fantasizing about the parties I held in my private residence with clear defamatory intent and intrusion into my private life," he said, adding that there had been "a monstrous operation of defamation".

"They were just dinners in which I monopolised the attention, singing, talking about sport and politics and gossiping," he said.

"I never paid money to have intimate relationships with my female guests and my female guests could not be considered escorts," he said.

He did however add that his accountant gave El-Mahroug "several thousand euros after Ruby's constant requests."

Referring to his phone call to a Milan police station when El-Mahroug was arrested, Berlusconi said he "never put pressure on Milan police".

He said he had wanted to avoid a diplomatic incident because he thought she was the niece of then Egyptian president Hosni Mubarak.

"I was sure that Ruby had a family link with Mubarak," he said.

The charge of exploiting an underage prostitute in Italy carries a maximum sentence of three years in prison and abuse of power up to 12 years.

The trial was one of the last in a series of scandals that helped precipitate Berlusconi's downfall in November 2011 that was triggered by a parliamentary revolt against him and a wave of panic on financial markets.

Berlusconi has frequently accused prosecutors of plotting against him.

On Friday, he said newspaper reports said the judges in the trial -- dubbed "Rubygate" in the Italian press -- had already decided to convict him.

"I hope not, otherwise this would be an uncivilized and barbaric country."