The case surrounding Mills was one of the most prominent of the scandals involving Berlusconi, Italy's richest media entrepreneur as well as its dominant political figure of the past two decades.
Berlusconi, who denied paying Mills to provide untruthful court testimony, was not in the Milan court to hear Judge Francesca Vitale read a brief statement declaring that the trial, which began in 2007, was now ended.
Prosecutors had been seeking a five-year prison sentence, but the decision effectively lifts the threat of any sanction against the 75-year-old media tycoon, who controls Italy's biggest private television broadcaster.
Fabrizio Cicchitto, parliamentary leader of Berlusconi's center-right PDL party, said the decision avoided the conviction of an innocent man. However, Berlusconi's lawyers had hoped for an acquittal.
The former prime minister's opponents leapt on the ruling and said Berlusconi had only avoided conviction on a technicality.
The decision was down to the strict limits on the length of criminal trials -- a widely criticized feature given Italy's notoriously slow justice system.
Once again, Berlusconi has been saved from facing up to his responsibilities by the statute of limitations, former anti-corruption magistrate Antonio Di Pietro, now head of the Italy of Values party, said in a statement.
Timing
Mills was convicted in 2009 of taking a $600,000 bribe in return for agreeing to withhold incriminating details about the former prime minister's business dealings when he testified in separate fraud trials against Berlusconi.
But the case against Mills, whom Berlusconi has denied knowing, was shelved the following year because the statute of limitations had run out and the British lawyer was never extradited to serve his 4-1/2-year sentence.
The two sides in Berlusconi's trial disagreed on exactly when the statute of limitations was due to kick in, and the state prosecutor had argued that the case should have ended between May and mid-July.
Berlusconi, who resigned as prime minister in November as the crisis in the euro zone menaced Italy, has repeatedly accused what he called politically biased left-wing judges of mounting a campaign to destroy him.
He has said he will support the government of technocrat Prime Minister Mario Monti, who is due to serve until elections in 2013, and it is as yet unclear if the ruling will have any effect on the political situation in Italy.
Berlusconi has kept a relatively low public profile in recent months, leaving former Justice Minister Angelino Alfano to act as leader of the PDL, and he has said he does not expect to run in the next election.
Berlusconi has been involved in a string of legal cases since he entered politics in 1994. He has either been acquitted or seen the cases expire under Italy's statute of limitations.
He still faces a series of trials linked to his Mediaset broadcasting empire and other issues including charges of paying for sex with an underage prostitute.
(Writing by James Mackenzie; Editing by Alessandra Rizzo)


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