Sex trade moguls thrive by the Blue Danube

The Festetics Palace near the shores of Hungary's Lake Balaton has witnessed a fair amount of colourful history in its time, not least the hosting last year of a summit of central European leaders including Czech President Vaclav Havel and his German counterpart, Roman Herzog.

Earlier this summer, though, the palace's sumptuous Baroque rooms were transformed into the setting for an entirely different kind of activity: the shooting of a pornographic film based on the life and loves of Mata Hari, the notorious First World War seductress and spy.

While Mata and her cohorts set to in front of the cameras, children were being escorted around adjoining rooms of the palace, most of which serves as a local history museum. Such a flagrant breach of good judgmentearned the palace director Laszlo Czoma a sharp reprimand from the Ministry of Culture and Education, which said at the very least he should have read the film script before agreeing to hire out the rooms.

But the incident highlighted an undeniable fact: that since the fall of communism, Hungary has become a Mecca for pornographic film-makers while the sex industry in general has undergone a phenomenal boom.

Insiders frequently refer to the country as the "Hollywood of blue movies". The capital, Budapest, which now boasts hundreds of highly visible prostitutes, peep shows and massage parlours, has gained a reputation as "Bangkok on the Danube", attracting sex tourists in hordes. Unfortunately, there are signs that, while the potential for corruption offered by the schoolchildren's experience in Festetics Palace might have been minor, not all Hungarian youngsters are escaping the abuse the industry brings in its train.

Italian porn film producer Gianfranco Romagnoli offers one primary reason for Hungary's attractions. "It's the girls," he beams. "They are the most beautiful in the world. And there is never any problem with supply. Back in Italy we have the Pope and sex is still somehow taboo. Here the mentality is very open. They like sex and see no need to repress it."

This is not quite the whole story. In addition to their legendary half- eastern, half-western good looks, Hungarian women also come cheaper than their west European counterparts. Anita Rinaldi (born Anita Skultety), who this year won a "Hot Gold" at the annual porn film industry awards in Cannes, can command pounds 4,500 a film, and is in a bracket of stars who can choose who they have sex with. But for most entering the trade in a bid to escape poverty, the reality is frequently more sordid.

"If you're low down in the porn film hierarchy you don't get any say in who your partner is," said Antonia Burrows, who teaches gender studies at Budapest's Eotvos Lorand University. "Sometimes you do not even get a choice of whether your partner is human."

Poor pay and conditions, physical abuse and an ever-present risk of contracting Aids are just some of the less savoury aspects of life for many entering the porn film business.

Apart from a cheap and plentiful supply of women, western producers like Mr Romagnoli have been attracted to Hungary because of its well-established film industry, and the opportunities to film in exotic locations. Last year a castle was used as the backdrop for an erotic version of Snow White and the Seven Dwarfs.

"You can set your films here in almost any period you like," enthuses Mr Romagnoli. "Good locations, good prices, beautiful girls: there is nowhere else in the world which offers such a good all-round package."

A big attraction that Mr Romagnoli singularly fails to mention, however, is the looseness of Hungarian legal restrictions on pornography. With more than 100 porn films being produced every year, the country is already responsible for more than 10 per cent of Europe's total output. But the shadow cast by the industry across society as a whole is becoming darker and more corrosive.

Signs that its tentacles are beginning to draw in children came to light last month when police in the northern town of Eger revealed that dozens of girls aged between 10 and 15 had been ensnared by a local porn pedlar with strong links to paedophile rings in western Europe and America.

According to Istvan Nagy, the head of Eger's criminal investigation unit, the victims were all lured by advertisements promising them fame and fortune as models and were then gradually talked into posing nude and participating in sex acts. Afterwards the girls were too terrified to tell their parents, many of whom actually delivered and collected them from their "modelling" assignments.

The Eger case has highlighted the current laxity of Hungary's laws on pornography. Whereas in most west European countries possession of child pornography alone is an offence, Hungarian law does not even criminalise its production. And while the main suspect in the case may well be charged with sexually abusing juveniles, it will be because he actually participated in some of the films, not because he made them.

"The law as it stands does not offer enough protection for juveniles," concedes Mr Nagy. "It is dangerous and should be amended."

For others, too, the Eger case has been the last straw. "Over the past six years we have been bombarded with pornography," said an Eger mother- of-three. "Some people say this is what living in a free society is all about. But it has gone too far."