Surveys show 5-Star is the most popular party ahead of the March 4 vote, but it lags a center-right coalition led by Berlusconi's Forza Italia (Go Italy!) — the bloc with most hope of obtaining a majority in Parliament.
“I have instructed my lawyers to prepare the case,” Berlusconi said in a radio interview after 5-Star's leader Luigi Di Maio accused Forza Italia politicians of contributing to a lucrative “business” involving camps for immigrants.
Such camps have been at the center of criminal investigations for alleged corruption.
More than 600,000 migrants have arrived in Italy from north Africa by sea over the last four years, and the issue has become the main battleground of the election.
With the ruling Democratic Party (PD) lagging in the polls, 5-Star is seen as the main obstacle to a centre-right victory, and Berlusconi and Di Maio have stepped up their attacks on each other while largely ignoring PD leader Matteo Renzi.
“If Di Maio won power it would be a catastrophe, Italy would be internationally isolated and our economy would be devastated by taxes,” said Berlusconi, 81, who cannot personally run for office due to a 2013 conviction for tax fraud.
Di Maio said he was “not worried in the least" by the lawsuit and published a Facebook post listing EU treaties on fiscal and immigration policy signed or backed by Berlusconi, which he said had sold Italy short. The post was titled "Berlusconi, seven times a traitor to the country.”