Italian ambassador Stefano Gatti recalled to Rome

The Italian ambassador to Australia is “recalled” to Rome in mysterious circumstances involving a Defence deal.

A spokesman for the Italian Embassy said Stefano Gatti returned to Rome “for personal and family reasons”

The Italian ambassador to Aust­ralia has been “recalled” to Rome in mysterious circumstances after he was accused of alleging that the Coalition government had “colluded” with the British over the billion-dollar frigate contract last year.

In a potentially explosive diploma­tic and political row, ­ambassador Stefano Gatti has left Australia without any official ­announcement or comment from ­either the Italian or Australian governments.

Mr Gatti was appointed to Canberra only in April last year.

The drama comes after Mr Gatti said Italian President Sergio Mattarella’s official visit to ­Australia scheduled for last year was cancelled due to tensions with Canberra.

Mr Gatti said last year the Italian­s were hoping to seal two agreements with Australia — a “strategic partnership” declaration and an agreement over defence­ industry — but Australia declined, forcing Rome to postpone the trip. Senior Australian government sources confirmed to The Australian last night that the ambassador, who was appointed before the announcement of the frigate contract, which Italian firm Fincantieri had expected to win, had been recalled to Rome.

No official Australian government complaint was made to the Italian government but Coalition MPs told The Australian last night there had been several complaints made to the Coalition that the ambassador was “bagging” Australia for collusion with the British and was “too close to the Left”.

One senior government source said the Italian ambassador had been behaving like an “activist” rather than an ambassador.

Ever since the announcement the British had won the frigate contract last June after Malcolm Turnbull had visited British Prime Minister Theresa May in London, the Italian government has been complaining about the Fincantieri loss. The Italian side was very confident of a win. The company had hired leading Liberal lobbyist ­Michael Photios, and believed the requirements in the contract ­ensured its victory.

It was convinced the tender reference to a “proven in-service” vessel ensured the Italians success because it was in service, and ­especially as the company said it could be ­delivered by 2020.

Instead, Defence went with Britain. The BAE Systems’ Type 26 Global Combat Ship is not yet in service and the first ship is set to be ­delivered by 2027.

Some Italian officials considered taking legal action against the Australian government over the reference to a “proven in-service” vessel. Despite dropping the idea of legal action, the new Italian government — in turmoil itself and publicly fighting with France, which has withdrawn its ambassador to Paris — has continued to complain about the loss of the ­tender. In an interview with an Italian community newspaper in October last year, Mr Gatti repeatedly said how “disappointed” Italy was with the decision, calling it “political”. “A different option was taken from what we expected … a decision which was, as confirmed, political.”

Government MPs said negative comments were being made about the ambassador’s continuing campaign of complaint, as well as an apparent closeness to the Left of politics. Despite no official complaint being made, the “negative comments” were reported to the Italian foreign office in Rome and Mr Gatti had been asked to explain.

Given the Coalition government’s reliance on big-spending defence industry contracts going into the May election, the row over the failed Italian tender and the recalling of the Italian ambassador has the potential to become an election issue.

The Department of Foreign ­Affairs has been notified Mr Gatti will finish his term as ambassador today, a government source said.

Mr Gatti last year said the Italian President’s trip had been dependent on Australia signing deals with his country. “We highlighted that a request to sign an agreement in the defence industry had already been made in 2015, but the request went unanswered by Australia,” Mr Gatti told community newspaper Il Globo.

“We made it clear that in order for the visit to be a success, these political choices must be made.

“When we received news that it wouldn’t be possible to go through with these agreements, it was relayed to Australians that the President would like to visit, but that it would be better to wait until 2019.”

A spokesman for the Italian embassy last night told The Australian: “The ambassador has returned to Rome for personal and family reasons.”