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FILE PHOTO: r Matteo Renzi gestures during the bell ceremony, to signify the start of the first cabinet meeting of the newly appointed Italian Prime Minister Paolo Gentiloni, at Chigi Palace in Rome, Italy December 12, 2016. REUTERS/Alessandro Bianchi/File Photo

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By Gavin Jones

ROME (Reuters) - A criminal investigation involving several people close to Matteo Renzi, including his father and his right-hand man, is muddying the image of the former Italian prime minister and threatening his prospects of a return to power.

Renzi's father Tiziano was questioned on Friday by prosecutors who suspect him of influence peddling to ensure a public contract was awarded to a businessman friend. Tiziano Renzi denies all wrongdoing.

The anti-establishment 5-Star Movement presented a motion of no-confidence against Sports Minister Luca Lotti, Renzi's closest political aide, who is suspected by prosecutors of revealing legal secrets in a strand of the same investigation.

Lotti, who served as cabinet undersecretary in Renzi's government, also denies all wrongdoing.

Renzi resigned as prime minister in December after losing a referendum on constitutional reform and was replaced by his former foreign minister, Paolo Gentiloni.

Last month he also quit as head of the ruling Democratic Party (PD) under pressure from internal critics who accuse him of moving the party too far to the right.

Renzi hopes to regain control of the PD in a primary election on April 30 as a first step to returning to power at a general election scheduled for early 2018.

The corruption investigation is complicating his ambitions even though it does not involve him directly.

"This affair makes it harder for Renzi to win the PD primary, it is already embarrassing to him and it could become crippling if it escalates," said Francesco Galietti, head of Rome-based political risk consultancy Policy Sonar.

"All the people involved are close to him and we see that, according to the prosecutors, they were being pushed, nudged and even blackmailed by his family and his inner circle."

The investigation has been in progress for weeks but got little attention until the arrest on Wednesday of Alfredo Romeo, a businessman accused of bribing an official at a public procurement agency to win lucrative contracts.

Italian newspapers on Friday published transcripts of testimony to prosecutors by the head of the agency, who said he had removed hidden microphones - which had been installed in the building by prosecutors investigating the corruption allegations - because he had been tipped off by Lotti about the investigation.

On Thursday Denis Verdini, another political ally of Renzi involved in the scandal, was sentenced to nine years in jail in a separate case in which he was found guilty of fraud and fraudulent bankruptcy.

(Editing by Robin Pomeroy)

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