The European Central Bank (ECB) has yet to decide whether Bank of Italy Governor Antonio Fazio acted improperly in a cross-border takeover scandal that has shocked Italy, ECB President Jean-Claude Trichet said yesterday.

Moving extremely cautiously on a saga that has dragged on for weeks, Trichet told reporters he needed more information on accusations that Fazio had favoured Italian lenders at the expense of foreign rivals in banking bids.

Mr Fazio, who has denied the charges of bias and refused widespread calls to resign, attended an ECB Council meeting on Thursday but sped away afterwards without making any comment.

Support for him back home is gradually dwindling and the Italian government is expected to approve a reform of the central bank on Friday that will clip his wings. Mr Trichet told a news conference on Thursday that the ECB had not opened any procedure against Fazio "at this stage".

"We are monitoring closely the situation. We will continue to be informed on a permanent basis," he said, adding with a smile. "Fazio is one of us. That is clearly the case."

Critics have accused Fazio of favouring Banca Popolare Italiana in its fight with Dutch Bank ABN AMRO for control of Italian lender Banca Antonveneta.

Fazio overruled the Bank of Italy's own analysts in allowing the Banca Popolare Italiana bid, while wiretaps by magistrates showed both he and his wife, Maria Cristina, advised the bank's chief executive about how to proceed with the offer.

Bankers have also accused Mr Fazio of favouring another bid from Italy's Unipol for Banca Nazionale del Lavoro at the expense of Spain's BBVA.

Mr Trichet told reporters that European banks had to be given equal treatment in takeovers.

"I restate that our principle is crystal clear: fair treatment, implementation of the single market in financial services in general and in the banking sector in particular," Mr Trichet said

He added that he was waiting for an English-language translation of a 24-page document that the Bank of Italy published last week in its defence.

The Fazio scandal broke in July with the leaking of wiretaps that revealed the governor's surprisingly close relationship with Banca Popolare Italiana's chief executive.