The five men allegedly levied between 10 and 30 euros ($13 and $40) per person every month on top of an annual payment of between 1,000 and 1,500 euros, Gaetano Ezio from Italy's anti-terrorism police told reporters.

The investigation was led by prosecutors in the Venice region after a Kurdish restaurant owner was beaten several months ago for refusing to pay.

"We worked out the financing mechanism for the PKK under a well established scheme. The group acted against those who refused to pay," Ezio said.

Investigators found a ledger during one raid containing a list of names and the amount of racket payments made.

The PKK is considered a terrorist organisation in Turkey, the European Union and the United States. In 1984 it began a separatist rebellion in southeast Turkey, an impoverished region populated mainly by Kurds.

The conflict has claimed around 45,000 lives, according to the Turkish army.