French PM accused of smear tactics

French prime minister Dominique de Villepin was fighting for his political life last night after being directly implicated in an attempt to smear his colleague, and deadly political rival, Nicolas Sarkozy.

The allegations- which also implicate President Jacques Chirac - come from a retired senior French intelligence officer in sworn evidence to two investigating magistrates.

General Philippe Rondot says that M. Villepin - on M. Chirac's orders - asked him to conduct an investigation in January 2004 into allegations of financial corruption against his fellow minister and political rival, M. Sarkozy.

The allegations turned out to be a crude forgery.

According to other evidence presented to the magistrates, M. Villepin may have known that the allegations were false.

A senior business figure close the prime minister is accused of being involved in concocting them.

M. Sarkozy was, at the time, already favourite to succeed President Jacques Chirac as the centre-right candidate in the presidential election next year.

Both President Chirac and M. Villepin are said to detest M. Sarkozy - then the finance minister, now the interior minister.

It is widely assumed that M. Chirac, 73, would prefer to see his protege, M. Villepin, succeed him as the leading figure on the French centre-right.

A "wave of panic" was said to have passed through the senior levels of French government yesterday when it became known that M. Rondot's testimony would be leaked in the afternoon edition of Le Monde.

Both President Chirac and M. Villepin immediately took the unusual step of issuing formal statements to the press denying that they had launched secret investigations into the alleged financial corruption of their colleague and rival.

However, the general's testimony, leaked to Le Monde, directly contradicts a panicky statement on the affair already made by the Prime Minister the previous day.

M. Villepin told the centre-right newspaper, Le Figaro, that, as foreign minister in 2004, he had asked the general to lead an investigation into international corruption and money-laundering.

No individual politicians were targeted, he said.

General Rondot - one of the most senior and respected figures in the French intelligence community - told the investigating judges that, au contraire, M. Sarkozy's name had been specifically raised by M. Villepin at the January 2004 meeting.

According to Le Monde, the two investigating judges have seized a memo written by the general soon after the meeting in which he summarised the discussions.

The general's memo reads: "Political objective: N. Sarkozy. Fixation on N . Sarkozy (cf conflict J. Chirac/ N. Sarkozy)."

The so-called Clearstream Affair turns not so much on sex, lies and videotape as on political ambition, lies and CD-roms.

Two years ago another investigating judge received an anonymous letter and then a CD-Rom containing the numbers of secret accounts at off-shore banks in a number of countries listed by Clearsteam International, a clearing bank in Luxembourg.

Among several senior business and political figures named in the letter and the disc was the then finance minister, M. Sarkozy.

A brief investigation by the judge revealed that the allegations had been faked.

Two other investigating magistrates, Henri Pons and Jean-Marie d'Huy, have been placed in charge of a judicial investigation into "slanderous denunciation".

The judges have raided offices at senior levels of the French government over the last two weeks.

A raid on M. Villepin's offices at the Matignon palace, the prime minister's official headquarters, is expected in the next few days.

M. Sarkozy is now runaway favourite to be the main centre-right candidate for the presidency next year.

However, M. Sarkozy is now said to fear that the Clearstream affair could yet blow up in his own face.

With the centre-right government already discredited by its retreat on an "easy hire-easy fire" jobs contract for the young, a major political scandal could cripple the chances of all right-wing candidates in next year's elections.

- INDEPENDENT