Approval is expected, but it is not a foregone conclusion - because Mr Bondi is suing many of the banks that are listed as creditors.

Citibank and Bank of America, which are major creditors, are each being sued for damages of up to Euro10 billion. Mr Bondi is suing 45 banks, 35 of which are Italian, he accuses of being co-responsible for the crash. Among the foreign banks are Deutsche Bank, Credit Suisse First Boston and UBS. He is also suing two auditing companies, Deloitte & Touche and Grant Thompson, which are now exchanging mutual recriminations.

Italian law enables companies to try to recover money paid to creditors in the year before a bankruptcy, if it is proved that some creditors were favoured over others. Mr Bondi says that this is precisely what happened and that banks were favoured over Parmalat bondholders.

His claim is supported by a comment of Vito Zincani, the magistrate overseeing the Parma investigation into the company, that on April 10, 2003 an interbank meeting discussed the alarming situation at Parmalat.

Calisto Tanzi, the troubled company's founder, might throw light on the banks' behaviour. When he spoke with magistrates for three hours on December 18 he seemed to have recovered sections of memory that deserted him a year ago. His interrogation will resume this month.

After the interrogation, Tanzi's lawyers said the questions concerned relations with various banks from the time that Parmalat was quoted on the stock exchange in 1990.

Mr Zincani, in an interview with Milan daily Corriere della Sera, said several banks sponsored Parmalat at that time, although even then 'technically it was bankrupt - the quotation served to pass the debts to others while leaving Tanzi in control'. The Tanzi family controlled 51 per cent of Parmalat when it collapsed.

One Parmalat trial for rigged accounts is under way in Milan and another for bankruptcy and criminal activities will begin in Parma in mid-2005.

Because of heart problems, white-haired Tanzi, 66, is allowed to live under house arrest in his villa at Collecchio, the Parmalat headquarters, after spending 275 days in prison to prevent him skipping the country or tampering with evidence. It is unlikely that Tanzi, who aimed to make his company the 'Coca-Cola of milk', will avoid condemnation.

When the scandal broke in December 2003, Tanzi disappeared for a week. It emerged that he had flown to Portugal, then Ecuador, which prompted speculation about a hidden Parmalat treasure planted there. He has denied that this exists, but property and bonds for only Euro250 million have been sequestered from Tanzi and 70 other people who are under investigation.

Investigations continue in Lugano, Switzerland and the Americas. It is suspected that a Uruguayan company, Winshay Trading, was involved in hiding Parmalat money, while New York lawyer Gianpaolo Zini - who spent a whole day shredding Parmalat documents when the scandal broke - could be helpful with investigations. Zini, one of the creators of the complex system of offshore Parmalat accounts, is under arrest.

On December 17, the list of Parmalat creditors was deposited with one significant omission: Fausto Tonna, the former financial director who is now seeking work in Parma. Mr Tonna had claimed Euro5.62 million from Parmalat, but his application was knocked back because of his 'lack of diligence'.

It is just over a year since a fax from the US revealed the full extent of the Parmalat imbroglio. Mr Bondi had already replaced Tanzi, but it was thought the Euro3.9 billion assets of one of the group's subsidiaries - Bonlat, registered in the Cayman Islands - would help stave off a disaster.

But the fax from accounts administration at the Bank of America ended those hopes. 'The Bank of America does not maintain an account with Bonlat Finances and the audit confirmation dated March 6, 2003, that you attached is fraudulent and did not come from our offices,' it said.

The game was up. For more than a decade, some Parmalat financial managers had been falsifying accounts by primitive methods such as copying bank stationery with scanners and then inventing reports of assets on them. But no one had spoken up. When the odour hit the fan and the fax, some culprits took hammers to computers containing incriminatory evidence.

Tanzi has admitted financing all major Italian political parties, which may be a partial explanation of the conspiracy of silence, but someone involved in cooking the books could have spoken out, as happened at Enron. It did not happen.

More than 100,000 Italian investors squealed that they had been defrauded, not only by Parmalat but by their banks. For the first time, consumer associations swung into action and several banks agreed to reimburse, in varying degrees, clients considered victims of insufficient or misleading information.

Mr Bondi is cutting back to a smaller range of brands in successful operations such as one in Australia. Parmalat director-general Carlo Prevedini says that this will provide a springboard for growth that will enable the company to challenge food giants such as Nestle and Danone. But he adds cautiously: 'I hope we remain under Italian control.'

The Bank of International Settlement said the Parmalat affair revealed shortcomings at all levels: administrative, auditing, banking and rating agencies. Several of the groups under criticism have tried to raise their game. The Wall Street Journal has written copiously about the courage of the austere Mr Bondi in taking on the banks, while investigative magistrates have reacted with speed that is unusual in Italy.

But if Mr Bondi, the Italian banks and magistrates have shown awareness of the damage to the country's reputation, the country's politicians have not.

Initially, both the government and opposition were vociferous about the need to improve corporate governance and investor protection, particularly by strengthening Consob, the Italian equivalent of the America's Securities and Exchange Commission. A draft law in this sense, which won the applause of the European Union, was prepared. It seemed the Italian parliament was going to match the US effort in introducing a new law to protect investors, five months after the Enron scandal.

But although the government has steamrolled through laws to protect Prime Minister Silvio Berlusconi and his cronies from condemnation for alleged financial misdemeanours, it has stalled on the new measures to protect investors.

One reason is that it would reverse one of the government's first measures, which almost totally decriminalised false accounting. This enabled Mr Berlusconi to wipe out charges against him.

The European Community court raised objections, which Mr Berlusconi ignored. It seems he has no intention of allowing this measure to be reversed.

The teeth of the proposed law have been drawn so that now it will not challenge the conflict of interest of the banks and the Bank of Italy. Because of the lack of local fund management companies, Italian banks manage a higher proportion of the population's savings than in most other Western countries. They both buy and sell bonds on their behalf.

The Bank of Italy is supposed to both ensure the solidity of the banking system and protect investors. Judging by recent results, however, when push comes to shove both the Bank of Italy and the banks would seem to leave investors high and dry.

A truncated new law will probably be approved by parliament, eventually. But its sluggishness and the castration of the proposed law partly explains why foreign investment languishes in Italy. The Parmalat affair is having yet another negative effect - it casts a shadow over Parma as site of the new European Food Authority.