A senior figure in the local Christian Democratic Union (CDU), Landowsky, who also headed the mortgage arm of the Berlin Banking Corporation, was one of three former executives to receive 16-month suspended sentences for breach of trust on Wednesday.

Prosecutors alleged that Landowsky lent 235 million euros ($314 million) to property developer Aubis in the 1990s without checking its creditworthiness. They said the state-controlled bank's involvement in projects to buy and renovate run-down communist-era buildings put some 78 million euros of taxpayers' money at risk.

The court in Berlin agreed that Landowsky breached the trust put in him by approving the risky loans, but it found only 1.5 million euros of damage could be proven.

Prosecutors with mixed emotions

State prosecutor Vera Junker said the verdict was a "partial success."

"We're happy the court was convinced by at least part of our case," she said. "But as for the rest -- the acquittals -- we still have to decide if we'll take further action."

Prosecutors had pressed for a three-year jail sentence for Landowsky and jail terms of three months to four years for the other defendants. At the end of the 19-month case, the court issued one-year suspended sentences to two additional former managers received while eight others were found innocent.

Landowsky's lawyer, Wolfgang Möhnbrock, said he wanted to evaluate the verdict closely before commenting on it. Before the verdict was given, he said he expected Landowsky to be acquitted.

"The court's reasoning was very detailed and needs further examination," he said. "We will, however, appeal my client's sentence."

Opposition politicians welcomed the sentence on Wednesday.

"Today's verdict gives at least some satisfaction to the people of Berlin," Green party politician Volker Ratzman said.

The irregular loans that led Landowsky to resign were uncovered in 2001 when Aubis -- a real estate company that received a major loan from the politician -- was found to have made a 20,000 euro donation to the CDU in 1995.

Scandal benefited SPD

The resulting scandal brought an abrupt end to Berlin's city hall coalition of conservatives and Social Democrats (SPD) and contributed to a wave of voter disaffection with a generation of politicians who appeared slow to adapt to unified Germany and mired the city's government in debt.

Berlin's Christian Democrats are still struggling to recover from the scandal under which the CDU-SPD government coalition collapsed. The SPD has governed the city with the formerly communist PDS party since the CDU's fall. The coalition, led by Social Democrat Klaus Wowereit, was re-elected last year.