The European Court of Justice found yesterday that Italy's broadcasting system was in breach of European Union law in its allocation of television frequencies. It said the system stifled competition by favouring existing broadcasters.

The ruling will not have an immediate impact on Mediaset, owned by Silvio Berlusconi, the former prime minister and billionaire businessman, but industry analysts said it could lead eventually to the network having to give up Rete 4, one of its three analogue channels. Domination of the air waves by the broadcasting duopoly of Mediaset and Rai, the state broadcaster, is likely to become a heated topic once more as Mr Berlusconi gears up to lead his centre-right opposition party into parliamentary elections.