Italian Prime Minister Silvio Berlusconi met Muammar Gaddafi on Monday looking to reinforce business ties, after the Libyan leader aroused a media storm by suggesting to a group of young women they convert to Islam.

Italian newspapers and opposition politicians responded angrily after the mercurial Gaddafi invited hundreds of young women hired by a hostessing agency to an event at a Libyan cultural centre in Rome and invited them to convert to Islam.

Several commentators accused Berlusconi of sacrificing principles and dignity for the sake of trade and investment ties with Libya, whose huge sovereign wealth fund has invested heavily in Italy in recent years.

What would happen if a European head of state went to Libya or another Islamic country and invited everyone to convert to Christianity? asked the daily Il Messagero. We believe it would provoke very strong reactions across the Islamic world.

Media reports said three women had converted on Sunday, although it was not possible to verify if that was true.

There was a repeat of the event on Monday and participants said Gaddafi also encouraged them to marry Libyan men.

It was very interesting, the role of the woman in Libya was very interesting, Barbara Persichetti, one of the women who attended told Reuters Television.

The weekend event, not far from the Vatican, followed a similar reception involving about 200 women on a previous visit by Gaddafi to Rome last year.

Ever since Gaddafi arrived here, he's been taking this country for a ride, like buying women, said Stefano Pedica, a senator from the opposition Italy of Values party.

HUMAN RIGHTS

The two leaders met for talks in the tent in which Gaddafi sleeps on foreign visits and discussed industrial cooperation projects and prospects for Italian companies in Libya, aides said. They were due to attend a formal dinner later on Monday to celebrate Italian-Libyan friendship.

Ties have flourished since a 2008 deal in which Berlusconi agreed to pay $5 billion (3.2 billion pounds) in reparations for Rome's colonial rule over Libya in the early 20th century and Italy is now Libya's biggest trading partner.

Among business leaders attending the ceremonial events was the head of defence and engineering group Finmeccanica, Pier Francesco Guarguaglini, who said Let's hope so, when asked about the prospect of winning business in Libya.

Italian business leaders generally have spoken favourably of Libya's record as an investor but Berlusconi's close relationship with Gaddafi also has led to accusations that economic interests have overridden other concerns.

Opposition politicians have focussed in particular on a deal under which Libya has agreed to take back illegal immigrants trying to sail to Italy from its ports.

Politicians from the federalist Northern League party, Berlusconi's coalition partners in government, have already expressed concern about Libya's 6.7 percent stake in UniCredit, one of the country's biggest banks.

As well as its shareholding in UniCredit, Libya also owns a stake in oil company Eni and has expressed interest in many more, including power company Enel.

Against this background, many Italians were resigned to Gaddafi's behaviour.

This is the typical kind of stupid thing that Gaddafi says, we should just expect this kind of behaviour, Rome resident Marina Merni told Reuters. I am surprised we treat him as an honoured guest but clearly there is an economic interest.

(Additional reporting by Eleanor Biles, Deepa Babington and Alberto Sisto; editing by Michael Roddy)

Libya Storm