Mr Scajola said that he had given security forces authority to use their weapons following the death of protester Carlo Giuliani at Genoa. Mr Giuliani was shot dead by police.
"After the death that night, I had to give the order to shoot anyone who breached the red zone," he said, referring to the most secure area of the city where the leaders of the G7 and Russia were meeting.
Mr Scajola went on to say that the "open fire" order had been given because of the risk of terrorism and an attack on United States president George W Bush.
Italy also surrounded the meeting with surface-to-air missile in case of air attacks - two months before the September 11 attacks on New York and Washington.
Opposition politicians and leaders of Italy's anti-globalisation movement have bombarded the minister with calls to tell the whole truth about what happened at the July summit.
Anti-globalisation group Genoa Social Forum leader Vittorio Angoletto said that Mr Scajola's admission showed that the government knew more that it was saying.
"The government has so many, too many, things to hide and it's clear that the truth will never be known. As we said on July 20, immediately after the death of Carlo Giuliani, Scajola must resign."
Senate deputy leader Cesare Salvi said that Mr Scajola should face further parliamentary questioning.
"It is extremely serious that the interior minister, having kept such an important piece of information from magistrates and parliament, should now speak about it lightly with reporters," he said.
The government has rejected calls for a parliamentary commission to look into Genoa.