Italian Prime Minister Silvio Berlusconi has stepped down as president of AC Milan to comply with a new law on conflicts of interest, the Serie A club said on Tuesday.

Berlusconi has been Milan's president since 1986, cheering them on to European Cup glory on four occasions, most recently in 2003, and seven domestic league titles.

But he also criticised current coach Carlo Ancelotti's tactics, forcing changes from the stadium box and from in front of his television.

"Of course I'm sad. I'm very sad," Berlusconi told reporters in Rome. Asked to rank his sadness on a scale from 1-10, Berlusconi replied: "Eleven".

"In any case, in the years I've been president, I've won more than anybody else in the world -- in international championships, that is," he added.

A new law designed to resolve the clash between Berlusconi's political power and his sweeping business empire was passed in July and was widely expected to force the billionaire businessman out of the Milan president's seat.

Club captain Paolo Maldini told Gazzetta dello Sport: "It will have been a very painful decision for Berlusconi even if stepping down as president does not mean abandoning the team completely. I am sure he will always be close to us.

"For Berlusconi, Milan is not a company to make money but an affair of the heart."

"NO EFFECT"

But opposition politician Sandro Battisti from the centre-left Margherita party said: "Berlusconi's resignation is a farce at the end of a comedy and the clearest proof that the conflict of interest law is a failure and can have no real effect on the premier's personal interests which remain firmly in his hands."

In a statement, the club said the presidency would remain vacant for the time being.

An Italian newspaper earlier reported that Berlusconi would hand the presidency on to his son Piersilvio, the deputy chairman of Berlusconi's media empire Mediaset.

Italian champions Milan are second in Serie A, four points behind Juventus.

After taking over in 1986, Berlusconi transformed a struggling club, appointing Arrigo Sacchi as coach and paying for three Dutch imports -- Marco Van Basten, Ruud Gullit and Frank Rijkaard -- who would make Milan probably the most admired club in world football at the time.

Milan won the league in 1988, qualifying them for the following season's European Cup -- which they went on to win and then retain in 1990, both times adding the Intercontinental Cup.

Sacchi eventually made way for Fabio Capello, among others, while on the playing front, Milan could count on some of Italy's best players such as Franco Baresi, Maldini and Roberto Baggio. Current coach Ancelotti won two European Cups as a player.

Leading foreigners such as Montenegrin playmaker Dejan Savicevic, Liberian striker George Weah, French defensive midfielder Marcel Desailly and more recently Ukrainian striker Andrei Shevchenko, just voted European Footballer of the Year, and Brazil's Kaka also added world-class quality to Milan sides.

Earlier this month Prime Minister Berlusconi escaped conviction in a long corruption trial after a court invoked a statute of limitations that meant time had run out to sentence him for bribery.

Berlusconi said after the verdict: "I was right to have been completely at peace about this because I was fully aware that I didn't do anything wrong."