Berlusconi is on trial for allegedly having sex with an underaged prostitute.
"I can rule out that there have ever been scenes of a sexual nature," the 76-year-old Berlusconi, wearing a dark blue suit, told judges as he addressed the packed Milan courtroom for the first time.
"Everything happened in front of staff and, at times, my children too came in to say hello."
Berlusconi, whose reported "bunga bunga" parties won worldwide notoriety, has repeatedly denied having sex with Moroccan-born nightclub dancer Karima El Mahroug, better known by her stage name of "Ruby the Heartstealer".
The centre-right leader is accused of giving Ruby cash and jewels in exchange for sex in 2010, when she was 17 years old and thus too young under Italian law to be paid as a prostitute.
He is also charged with abusing the powers of his office by getting her released from police custody after she had been arrested on unrelated charges of stealing a €3 000 bracelet from a friend. He denies the charges.
Crowds outside the court as were divided, as ever, between supporters and critics debating Berlusconi's role in the scandal that helped precipitate his departure from power last year.
"He's always done exactly what he has wanted to do, he brought this country to its knees, where we are now, handing money out here and there, don't get me started on it please," Milan resident Rosalinda Fazzi told Reuters television.
Berlusconi told reporters in April he had hosted "burlesque games" at his residence.
Prosecutors say dozens of showgirls and aspiring starlets received cash and gifts for taking part in sex games.
Moroccan model Imane Fadil testified before the court in April that at one of the parties young women dressed up as nuns and stripped off while performing raunchy pole dances.
At Friday's hearing, Berlusconi again accused magistrates of mounting a politically-driven campaign against him and defended the young women involved in the trial.
"The trial has damaged these girls, and this is is the most painful part of it," he said.
Berlusconi also said he did not exert any pressure on police when, one night in May 2010, he phoned officers to ask them to release Ruby from custody, describing her as the niece of former Egyptian President Hosni Mubarak.
"I read in the media that this court has already decided to convict me, but I don't want to believe it," he said.
Berlusconi, who quit in November amid a mounting financial crisis, has hinted several times he plans a return to the political front line, but said this month he may not stand in elections next spring. – Reuters