Fraud allegations made by Philippe Plantagenest, a former banker with Socialist Party connections, could force the resignation of the influential and much-respected French Finance Minister, Dominique Strauss-Kahn.
Mr Plantagenest, the former head of a subsidiary of a student bank, has told investigators that Mr Strauss-Kahn accepted pounds 60,000 for "fictitious" legal work for the bank, before he entered the government two years ago. The Finance Minister says the fees were earned and perfectly normal.
It seems likely, none the less, that he will be placed under formal investigation. If so, he will come under enormous pressure to resign.
The suave and pragmatic Mr Strauss-Kahn is popular with business, the markets and other EU governments. He is an important figure in the Socialist- Communist-Green Jospin coalition but also a significant factor in international market confidence in the euro. If he were obliged to resign the impact would be felt far beyond French borders.
The Strauss-Kahn affair relegated the Anglo-French beef crisis to the inside pages of French newspapers over the weekend. It was also, undoubtedly, a matter of much greater concern to the Prime Minister, whose reputation as the Mr Clean of French politics is at risk by association.
Although Mr Jospin is not personally involved in the affair, several other close allies of the Prime Minister have been named in a judicial investigation of the alleged pillaging of a student bank - the Mutuelle Nationale des Etudiants de France (MNEF). It is alleged that a string of Socialist party figures - many of them former-members of a shadowy Trotskyist group - embezzled from the bank over the past 10 years.
Philippe Plantagenest, 47, is a distant scion of the Plantaganet family that once held the British throne, and therefore a far-removed relative of the Queen. He is also a former Trotskyist, who once worked under the code name "Planta". He moved into mainstream socialist politics in the 1970s. He became head of a subsidiary of MNEF, which had become a Socialist fiefdom because of its links with student politics.
Mr Plantagenest, who is himself under formal investigation for fraud, has told examining magistrates that Mr Strauss-Kahn's legal work for the bank was fictitious. The magistrates are said to have documents that corroborate the allegations.
French newspapers predict that Mr Strauss-Kahn will be placed under formal investigation -- mis en examen - for "forgery and use of forgeries" in the next few days.
Although this does not amount to proof, or even a formal charge, there is a tradition in French governments, going back six years, that ministers must resign if they are mis en examen. Mr Jospin has reportedly assured Mr Strauss-Kahn, a long-time friend and ally, that he will not be held to this standard. But it is widely forecast that the Finance Minister would resign, rather than cripple the government.
Mr Strauss-Kahn cut short a visit to Vietnam and returned to Paris on Saturday. His lawyers hope they can persuade the investigators not to implicate him in the affair but to make him an "assisted witness"; helping the inquiry, rather than being a target of it.Reuse content