Antonio Fazio, governor of the Bank of Italy, was under siege yesterday from prosecutors, politicians and unions after leaked documents fuelled suspicions of his alleged bias in handling an Italian bank takeover battle.

The furore broke out after Italian newspapers published transcripts of telephone conversations taped on the orders of prosecutors in Milan and included in a court document.

Mr Fazio was recorded revealing a central bank decision to approve a bid for Banca Antonveneta by Banca Popolare Italiana, another Italian bank, to BPI’s chief executive before it was publicly announced.

BPI is in a tussle with ABN Amro of the Netherlands for control of Antonveneta. The contest has raised passions over the prospect of foreign ownership of one of Italy’s mid-sized financial institutions.

Last night Consob, Italy’s stock market regulator, suspended BPI’s bid for Antonveneta as “a precaution”. Consob cited a “lack of information” in the documentation about the bid and problems with “financial guarantees”.

The leaked transcripts suggested Mr Fazio wanted BPI to win the battle, which would destroy his claims to be an independent banking regulator.

“Come as you usually do, through the back door,” Mr Fazio told BPI’s Gianpiero Fiorani in another conversation, to which Mr Fiorani replied: “OK, otherwise there will be problems.”

On Tuesday, after the leaked transcripts were published, the central bank said that it had acted correctly. Mr Fazio issued no separate statement yesterday about the taping of the conversations. Last week he publicly rejected criticism that he had skewed the odds in favour of BPI.

Mr Fiorani has made no public comment since the transcripts were published. BPI has insisted it has acted properly during the takeover battle.

Mr Fiorani is under investigation for possible market abuse and colluding with other Italian businessmen to beat ABN Amro for control of Antonveneta.

Luigi Leone, leader of the biggest union representing Bank of Italy employees, said: “Fazio has no choice but to resign. Only a timely gesture can save the central bank’s credibility.”

Some politicians condemned Mr Fazio’s behaviour. “I have contended for some time that the regulator is not doing his job but is part of a system,” said Bruno Tabacci, head of the industry committee in parliament’s lower house. “The so-called defence of ‘Italianita’ [Italian control of Italian banks] was just a smokescreen for the defence of a power group.”

Most ministers in the government of Silvio Berlusconi, prime minister, maintained a discreet silence. However, Francesco Rutelli, a senior opposition leader, said: “If a regulator fails to be impartial and puts on the shirt of one of two sides in a contest, this does not help the authority of the Bank of Italy.”

At present, Mr Fazio, 68, who was appointed in 1993, serves an indefinite term. Prosecutors are investigating the Bank of Italy’s role in allowing BPI and its Italian allies to build a stake rapidly in Anton-veneta. Backed by Consob, they have frozen the shares amassed by BPI and several Italian businessmen in Antonveneta.