The murders of two courageous Sicilian judges in 1992 shocked Italy to the core, scandalised Europe, and forced the Italian state to take the Mafia threat seriously for the first time.

But last week, Giovanni Brusca, the man who killed the first of those judges, Giovanni Falcone, by detonating a huge bomb under the Palermo airport motorway, told a heavily guarded 'bunker court' inside Rome's Rebbibia jail that the Italian authorities were secretly trying to cut a deal with Salvatore 'Toto' Riina, the capo di capi of Cosa Nostra at the time and the architect of the atrocities. Their efforts went on to the last minute.

Until he turned pentito, or supergrass, Giovanni Brusca was one of Sicily's most ruthless mobsters, held responsible for between 100 and 200 murders. Nicknamed Il Maiale – the pig – it was Brusca who kidnapped an 11-year-old boy called Giuseppe di Matteo, the son of another gangster, held him for 26 months, then had him strangled before dissolving his body in acid.

Brusca told the hearing that shortly before Falcone's assassination, Toto Riina met a politician who was accompanied by a police escort, and handed the politician, whom he refused to name, a list of demands that had to be met before the Mafia would stop its increasingly brutal war against the state.

The magistrate who now holds Falcone's post of chief anti-Mafia magistrate for Palermo, Antonio Ingroia, said that he took Brusca's claims very seriously. "I don't just think it's possible, but in fact that it's extremely probable this is true," he said. "We would be very interested indeed to learn the name of the person Riina is supposed to have met with, though I don't think we're going to yet."

Another high-profile victim of the Mafia in 1992 was Salvo Lima, who as mayor of Palermo was regarded as Christian Democrat leader Giulio Andreotti's contact for the Mafia. Brusca told investigators in Rome last week that between Lima's murder and the killing of Falcone two months later, politicians suggested to Riina that he stand for election to the European Parliament.

The implication is that, far from being committed to taking resolute action against the Mob, Rome's politicians were flirting with them even as Mafia attacks on the state escalated.

Brusca, who is serving a life sentence, was giving evidence against two senior Carabinieri police officers, Mario Mori and Mario Obinu, who are suspected of having links to the Mafia.

Falcone, his wife and three bodyguards were killed by a bomb planted under the highway outside Palermo on 23 May 1992. Two months later, his magistrate colleague Paolo Borsellino and five bodyguards died in a similar attack. Both murders were ordered by Riina, who was captured in 1993.

The killings were prompted by the magistrates' increasing success in prosecuting mobsters. Falcone and Borsellino were key members of the Anti-Mafia Pool of investigating magistrates who combined forces, sharing information and responsibility to prevent the Mafia being able to end investigations with a single bullet.

Both complained, however, that their work was being hampered by Mafia informers within the security services.

"But Riina wasn't satisfied; he wanted more," Corriere della Sera reports Brusca as saying. "Someone suggested that he make contact with the Italian Northern League," – the secessionist party based in Lombardy that is today part of Silvio Berlusconi's ruling coalition. Brusca added: "I don't know what came of it because in the meantime Riina had found a strategy he was very satisfied with", an apparent reference to the policy of high-profile assassinations.

The killings shocked the nation, but rather than increase Cosa Nostra's influence, they caused widespread revulsion. The backlash against the group and the subsequent crackdown is thought to have allowed rival crime syndicates, including Naples' infamous Camorra, to expand.

Brusca also claimed that Riina's successor as Godfather, Bernardo Provenzano, backed the assassinations of the magistrates, despite his reputation as the "moderate Mafioso".

"Provenzano didn't like spectacular attacks," he said, "but he shared the blame for the killing of Falcone and Borsellino with Riina."

After the bloody years of the 1980s and early 1990s, the arrests of Riina, Brusca and other senior gangsters seriously wounded Cosa Nostra.

However, it appears to be regrouping, according to Ingroia. He said that Cosa Nostra was currently trying to re-establish links with mafias in the US, and hopes to speed its transition from the bloodthirsty organisation of the 1980s and early 1990s to an international financial crime syndicate.

But he added there was no obvious Cosa Nostra capo di capi like Riina or Provenzano, who was captured in April 2006 near his home town of Corleone after decades on the run.