The house that Jacques built starts to crumble

In Fontenay-Sous-Bois, a part leafy, part grim suburban town, east of Paris, there stands a group of three blocks of low-rent public housing, known as habitations à loyer modérés or HLM's. Other tower blocks stand in the middle distance but the trio are distinct: they are shabbier than the rest and they belong to the city of Paris, six miles away.

In Fontenay-Sous-Bois, a part leafy, part grim suburban town, east of Paris, there stands a group of three blocks of low-rent public housing, known as habitations à loyer modérés or HLM's. Other tower blocks stand in the middle distance but the trio are distinct: they are shabbier than the rest and they belong to the city of Paris, six miles away.

Inside the blocks the paint is peeling and the lifts are often out of action. Life in HLMs is rarely a delight, but the scores of blocks built in the 1980s and early 90s are among the worst. Some went up in the city but most were erected beyond the Boulevard Périphérique, outside the city boundary.

The re-housing of poorer and darker coloured people outside the capital was, City of Westminster-like, a deliberate policy of Jacques Chirac, Paris mayor from 1977 to 1995. During his regime, he made the City of Light, whiter, richer, more bourgeois and so more likely to vote for his party, the Rassemblement pour la Republique (RPR).

The generous building, renovation and maintenance programme for public housing, of £200m per year in the late 1980s, had another submerged advantage for the patriotic, conservative, neo-Gaullist, RPR - part of the cost of each housing contract was "kicked-back" to RPR funds.

The Fontenay tower blocks are, in other words, part of the "house that Jacques built": an exploitation to sustain the political ambitions of one man.

But the foundations of the "house" have been crumbling for years. And the political scandal that has erupted in the past 10 days - a tangled tale of videotapes, lies, treachery, dirty tricks and double dealing - threatens to expose the foundations of Jacques' house once and for all.

But Chirac, now President of the Republic, is a charmed politician. By an extraordinary stroke of luck, the scandal has deeply embarrassed his great rival, the Socialist Prime Minister, Lionel Jospin.

A videotape surfaced which detailed the systematic ripping-off of the Paris town hall, until at least 1992, to fund Chirac's political career, allegedly on his orders. The tape was recorded in 1996 by Jean-Claude Méry a senior RPR official and fixer, now dead. He knew what he was talking about; it was his job to shake down contractors for the cash.

Méry said about £4m a year was "kicked back" from the public housing budget from 1985 to 1992. (The second date is important as it's two years after the political parties promised to stop such practices.)

Once, in 1986, said Méry, he delivered five million francs (£500,000) in cash to Chirac. The President dismissed the allegations as " abracadabrantesque". Then it emerged last Sunday that a copy of the tape had been in the possession of with the former Socialist finance minister, Dominique Strauss-Kahn, one of the closest allies of Jospin. Manipulation? Dirty tricks? One scandal, it seemed, would cancel another, Chirac would escape again. Or maybe not.

The tape revelations deepened the scandal and turned the fire on the left last week. But the glee of Chirac's supporters was misplaced. By the end of the week, it was Chirac's people who wanted an "amnesty" for party-funding frauds or a general statement of "repentance" by politicians.

It might have been better for Chirac had the scandal died quietly, but now it will run and run. Public and media attention will be re-focused on the three criminal investigations in progress into the allegedly illegal practices at the Paris town hall in the Chirac years.

Although the video was damning - and RPR claims of forgery can be discounted - it is not the only piece of evidence suggesting Chirac knew what was going on.

The RPR national headquarters was largely staffed in the 1980s and early 90s by people nominally on the town hall's payroll. Chirac's initials are on documents approving at least two illegal appointments of this kind. There is also evidence of the widespread fiddling of the electoral rolls in Paris from 1989 onwards in aid of the RPR. Former town hall/RPR employees allege this gerrymandering was personally inspired by Chirac.

Almost all of Chirac's key associates from those years are now under criminal investigation, including Alain Juppé, who became prime minister, and Jean Tiberi, who became mayor. Chirac would also have been mis en examen or "placed under investigation" were not for a (disputed) reading of the constitution that makes the President immune to legal action of this kind.

Though such scams existed in other French cities in the 1980s, there is evidence that the illegal practices linked with Chirac continued after the crimes "amnesty" in 1990. Other French politicians have been jailed for lesser abuses - in 2002 Chirac hopes to be elected once again.