Berlusconi, who is the brother of club president, Silvio, was filmed using offensive language in reference to Balotelli. The vice-president was heard saying before the clash with Udinese "Let's go and watch our household's little n***** [play]."
AC Milan has declined to comment on the incident which went viral this week, but on Thursday the official club website released a picture of the two together before the friendly against Sant’Angelo Lodigiano.
Berlusconi has insisted that the term used to reference the ex-Manchester City player was a term of endearment towards Balotelli and his comments are not to be mistaken as a racist slur.
The issue just comes weeks after Rossoneri star Kevin-Prince Boateng received worldwide praise for walking off the pitch during a friendly match against Pro Patria where he and other players were the victims of racist abuse.