By Alaa Shahine

ALEXANDRIA, Egypt, May 13 (Reuters) - An Egyptian cleric said on Tuesday he would sue the Italian state for allowing the CIA to kidnap him in Milan in 2003 and fly him to Egypt where he was imprisoned and tortured.

Hassan Mustafa Osama Nasr said his lawyers would file the suit on Wednesday, the day a criminal trial resumes in Milan of seven Italian spies and 26 Americans accused of taking part in the transfer, or "rendition".

Nasr, also known as Abu Omar, said in an interview at his apartment in the coastal city of Alexandria that he wanted 20 million euros ($31 million) in compensation. However, he said he was prepared to accept an out-of-court settlement.

"I am ready and open for a ... solution," he said, sitting in a room with walls decorated with verses from the Koran and a poster of the al-Aqsa mosque in Jerusalem.

"But the compensation will still have to be generous because of the injuries I sustained -- the kidnapping, the oppression, the torture and the violation of the privacy of my home."

The judge in the criminal trial is expected to decide on Wednesday whether to call Prime Minister Silvio Berlusconi as a witness, which could make him the first Italian premier to testify in a criminal case over secret CIA transfers of terrorism suspects.

The Americans, most believed to be from the CIA, are being tried in absentia. The Italian defendants include Nicolo Pollari, the head of the SISMI military intelligence agency at the time of the incident.

Nasr said Berlusconi could reveal more details about the case if he was called to testify.

BUSH ALLY

Nasr, a stocky 45-year-old man with a bushy beard, said his suit would refer to the Berlusconi administration that served between 2001 and 2006. He said he was sure the billionaire politician, who has defended the Italian spy agency against accusations of wrongdoing, was aware of the incident.

"Sure Berlusconi knew about the case because it had to do with the sovereignty of Italy," he said.

A strong ally of U.S. President George W. Bush, Berlusconi has denied any knowledge of the case and also opposed the trial, arguing it could hurt Italy's reputation in the global intelligence community.

If the judge calls Berlusconi and Romano Prodi, who took over as prime minister in 2006, they must testify.

Prosecution witnesses at the trial will include Nasr's wife.

Prosecutors say a CIA-led team grabbed Nasr in a Milan street, bundled him into a van and drove him to a military base in northern Italy.

He was then flown to Egypt, where he says he was tortured with electric shocks, beatings, rape threats and genital abuse. He said his compensation demands were only fair.

"I was tortured for 14 and a half months ... I suffer now from heart and kidney problems. I have psychological problems. My family is scattered. I have not seen my children for three to four years," he said.

"The future for me in Egypt is dark ... I want to leave."

Nasr was released from detention in 2007. Struggling to find a stable job, he has spent much of his time writing about his experiences. He plans to publish a memoir this summer. (Writing by Alaa Shahine; editing by Andrew Dobbie)

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