Rome:  Prime Minister Silvio Berlusconi lost a defamation suit he brought against The Economist magazine over a 2001 cover story that accused him of being "unfit to lead Italy", the British publication said on Friday.

Berlusconi, one of Italy's richest men, was ordered by a Milan court to pay the magazine's legal costs of 25,000 euros ($35,760) after a Milan court rejected his libel claims.

The Economist's April 26, 2001, edition ran a front page photo of the media mogul with the headline: "Why Silvio Berlusconi is unfit to lead Italy".

It accused him of having conflicts of interest, analysed his business empire and detailed trials against him, in an issue which came out just ahead of elections that Berlusconi won.

"They (The Economist's arguments) fully fall within the right to criticise, which is guaranteed by Article 21 of the constitution," Milan Judge Angelo Ricciardi wrote, in a copy of the ruling provided to media by The Economist.