Mr Berlusconi, who is rarely lost for words, squinted, then put down his pen, stared at the table and glanced away.
Finally he put up his hands and said: "No, I have never had any problems with Angela Merkel. In 20 years of politics I have never insulted anyone and this accusation was made up by someone who wanted to turn Angela against me.
German Chancellor Angela Merkel. Photo / AP
"I was not an easy person to deal with and I was quite tough. I had the courage to oppose some of the proposals made by Merkel and [Nicolas] Sarkozy [on austerity policies in Europe]." The question may come to rank as vintage Paxman, on the eve of his departure from Newsnight. After 25 years as presenter of the current affairs programme, his last episode will air next month.
Mr Berlusconi's resignation as prime minister in Nov 2011 was in part brought about by the scandals over alleged sex parties he held at his mansion outside Milan, where it is claimed that aspiring models and showgirls performed strip teases. Last year, at the end of a two-year trial, Mr Berlusconi was found guilty of paying for sex with one of the women, a 17-year-old erotic dancer known as Ruby the Heart Stealer, whom prosecutors said was working as an underage prostitute.
Despite the conviction, Mr Berlusconi claimed the bunga bunga parties were fabricated by his adversaries.
"They manipulated reality. Luckily I am a strong person and I was able to take it," he said.
The former premier also told Paxman that he hoped he would "go down in history as a father of the country". The many accusations against him of corruption, bribery and tax fraud were entirely baseless, he insisted.
He also criticised Beppe Grillo, the maverick comedian and blogger whose anti-establishment Five Star Movement is expected to perform well at this month's European Parliament elections.
Mr Grillo was "a potential dictator" reminiscent of Pol Pot, Stalin and Robespierre, Mr Berlusconi said.
He added that a United States of Europe was a dream that would never come true, although had it done so he would have proposed Tony Blair as its first president "because he was really charismatic".