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Phone-tap scandal threatens Balladur

A telephone-tapping scandal, described by a former security official as "making Watergate look like child's play", has erupted on the French election scene, causing pandemonium in government ranks and threatening the presidential ambitions of Edouard Balladur, the Prime Minister.

In the space of one hour last night, Mr Balladur ordered the suspension of all regulations governing the authorisation of emergency surveillance and instructed the chairman of the monitoring committee to draft better ones; the head of police forensic science, Jacques Franquet, offered his resignation; and the Interior Minister, Charles Pasqua, cut short a visit to Marseilles to return to Paris.

The origins of the crisis lie in what has become known as the Marchal- Schuller affair, a sordid and complicated tale in which influential members of the RPR, the governing party, are suspected of trying to cover up irregular payments to finance a Balladur rally. Such allegations, if proved, could seriously damaged Mr Balladur's chances of becoming president.

The phone taps in question were placed on the private and office lines of Dr Jean-Pierre Marchal, a psychotherapist and sexologist, whose son- in-law, Eric Halphen, was the judge presiding over the investigation into the funding of the rally. Dr Marchal, it is said, offered to arrange for certain suspects to pay for the privilege of not being investigated. He was arrested at Charles de Gaulle airport on 20 December after receiving a large sum of money in cash from Didier Schuller, a local politician in the Hauts-de-Seine region adjoining Paris.

Although the RPR funding affair has so far led to 15 arrests and one ministerial resignation, there was no suggestion that Mr Balladur was in any way involved. The closest the scandal got to him was the finding by a Paris appeal court judge earlier this month that the taps - authorised on Dr Marchal's phone by Charles Pasqua, in his capacity as Interior Minister - were illegal.

But the scandal still did not touch Mr Balladur, until this weekend, when Le Point magazine said it had evidence that an earlier surveillance of Dr Marchal's phone lines, also in December, had been authorised by Mr Balladur himself.

When the story broke, Mr Balladur acknowledged that he had authorised the tapping, but insisted that he had done nothing wrong. All the legal requirements for authorising telephone surveillance had been observed, he said. "Everything was perfectly regular and perfectly legal. I know that we are in an election campaign and it's open season. I defy anyone to prove the contrary."

Now, though, Mr Balladur is in serious trouble. Late yesterday afternoon, "an authorised source" at the Prime Minister's office issued a statement saying that Mr Balladur would never have authorised the tapping if "all the elements" of the case had been known.

The source said that the forensic police of the Hauts-de-Seine - which has to make the request for surveillance, had "given the impression" that they were dealing with a case of "attempted blackmail and extortion with menaces by an organised gang" (this would have given legal grounds to authorise the tap). It was clear, the source said, that there had been no such case.

By yesterday evening, the head of the judiciary police tendered his resignation ("to remove the police from all polemic"), and Mr Balladur ordered the rewriting of the emergency surveillance regulations. Television commentators were asking whether Mr Pasqua could survive as Interior Minister.

When the appeal court judge found against the Pasqua-authorised tappings earlier this month, the question he had to answer was not only whether the requisite procedures for authorising surveillance were followed, but whether the original reason for ordering the tapping was legitimate. He decided it was not. The implication of his ruling was that the tap had been ordered for political, not legal reasons.