ROME - Italy's main political forces on Friday committed to keeping an uneasy coalition in place for the sake of the recession-hit country despite a landmark court ruling against former prime minister Silvio Berlusconi.

There was a cautious reaction on financial markets, with the main stock index in Milan inching down 0.37 per cent while shares in Berlusconi's Mediaset business empire plunged by 2.43 per cent.

"Government in danger," said Il Messaggero daily, while Il Fatto Quotidiano said the alliance between Berlusconi's centre-right and Prime Minister Enrico Letta's centre-left was now "a dead man walking".

But reactions from Berlusconi lawmakers were more measured, despite protesting what they called an unjust ruling that bars the billionaire tycoon from being a candidate in elections for the next six years after being convicted of tax fraud.

"Silvio Berlusconi's legal woes will not be a problem for the government," said Mara Carfagna, a leading member of Berlusconi's People of Freedom party. "This anger we all feel must not boil over," she said.

The greater uncertainty is whether Letta will manage to contain growing discontent within his own Democratic Party (PD) about governing together with a coalition led by a confirmed tax fraudster.

Some leftists have called for the 76-year-old Berlusconi to be expelled from his seat in the Senate as soon as possible in line with new rules, although this would aggravate tensions in the coalition. Alfonso Stile, a law professor at Rome's Sapienza university, said the procedure to exclude him from parliament was in any case "long and tortuous".

Italy's top court on Thursday handed Berlusconi his first definitive conviction in a 20-year political career dogged by legal woes and sex scandals. The court ordered the three-time prime minister to do a year of community service or be placed under house arrest - a sentence due to be enacted in October. An embittered and visibly shaken Berlusconi delivered a video message on Italian television late on Thursday in which he dismissed the sentence as baseless and vowed to continue his political career. Berlusconi's sentence is still to be determined exactly but his passport will be taken away, he will need court permission for various political activities and even his knighthood could be withdrawn.

Letta on Thursday called for calm "for the good of the country" as he struggles to lead the eurozone's third largest economy out of its worst post-war recession and a devastating unemployment crisis. The current government was installed following a two-month deadlock between Berlusconi and the Democratic Party after close-run February elections. The case against Berlusconi revolved around the purchase of film distribution rights by Mediaset - the platform for his first entry into politics. Berlusconi is still appealing convictions in other cases for having illegal relations with an underage prostitute, abusing his prime ministerial powers and leaking a police wiretap to damage a political rival.

Prosecutors have also filed charges alleging that he bribed a senator to join his ranks in a move that helped bring down a previous government in 2008.

All other fraud and bribery charges against him over the years have either been overturned on appeal or have expired under the statute of limitations thanks to Italy's slow-moving justice system.

Berlusconi has been repeatedly written off in the past but re-emerged thanks to his formidable political skills and charisma on the campaign trail.

But some analysts on Friday predicted his demise.

"Starting today, we are beginning a post-Berlusconi Italy," said Stefano Folli, a columnist for the Il Sole 24 Ore business daily.

Marcello Sorgi, writing in La Stampa, said: "His time is over... The question now is not whether Berlusconi will leave the scene or even when but how."

Giovanni Orsina, a politics professor at LUISS university in Rome, was more wary.

"Those who think this story is over or nearing the end are mistaken," he said. "It is true we are now a lot closer to the end of Berlusconism. But the end will be long and risks being bloody".

Italians reacted with little surprise to the verdict.

"This conviction is important for everyone, not just Berlusconi. A conviction is not just nothing," said Paolo Grazioli, a 76-year-old pensioner.

"But one thing is for sure - he is not going away to a retirement home!"