Why the Italian Navy posed the greater wartime threat

Was the Italian Navy a more serious threat to Britain in the Second World War than the German surface navy?

Yes. It was a large and capable fleet, concentrated in the Mediterranean and located where it could repeatedly interfere with British operations and communications.

Caricatures about national character obscure the Italian Navy's operational strength. The Regia Marina fielded a substantially larger surface force than Germany and did not have to disperse it across several distant seas. Its central Mediterranean position placed it close to British convoys, bases, and imperial communications. Geography and concentration made it an especially persistent threat even when individual engagements were inconclusive.