Ousted Benfica boss in threat to sue government

Opposition alleges political involvement as the ex-president of Portugal's most famous club is placed under house arrest

The former president of Benfica, Portugal's most famous football club, is threatening to take the Portuguese government to the European Court of Human Rights after being kept under house arrest for four months without charge while under investigation for corruption.

Joao de Araujo Vale e Azevado, who was defeated in the election for president of the club in October after having run it for three years, was arrested by Portuguese police in February and questioned for eight hours.

Since then he has been kept under house arrest at his estate outside Lisbon. He is not allowed to leave the estate, although he can receive visitors and use the phone and computer.

Investigators have been poring over the accounts of a series of companies that Dr Vale e Azevado runs in the construction and leisure sectors, but will have to wind up the investigation in two months if no charges are brought.

If this proves to be the case, it is understood that Dr Vale e Azevado will sue the government in the European court for infringing his human rights.

Friends of Dr Vale e Azevado believe that the investigation has been prompted by the political row that blew up while he was running Benfica.

The businessman took over the club in 1997, when it was in severe financial trouble, and controversially led a move to break the stranglehold on broadcasting rights for football held by the state broadcaster and marketing group Olivera do Sport. Instead, Benfica struck its own deal with commercial network SIC.

On the back of this, Dr Vale e Azevado hired British merchant bank Altium to put together a 45m euro (£28m) deal to refinance the club and float it on the Lisbon stock market.

However, the plan was scuppered in October when a rival candidate for the presidency of Benfica, Manuel Lino Rodrigues Vilarinho, won the election. He promised that the club would sign Jardell, the Brazilian striker, to revive the team's fortunes. This signing has yet to be completed.

But Dr Vilarinho has succeeded in floating the club on the stock market, in a deal backed by Lisbon's Banco Espirito Santo, although this raised only £9m.

Benfica is still facing financial troubles after its worst season in living memory. The club, which has won the Portuguese title 31 times as well as the European Cup, came sixth in the league and did not qualify for the lucrative Uefa Champions League.

Dr Vilarinho has unveiled plans to knock down the club's famous Stadium of Light and build a new state-of-the-art 80,000 seat arena, which is likely to cost up to £300m.

Financial commentators have questioned Benfica's ability to raise the money or to build the new stadium in time for the European Championships, which are due to take place in Portugal in the summer of 2004.

Supporters groups have called for the return of Dr Vale e Azevado as president of Benfica. Meanwhile, opposition politicians have accused the government itself of being behind the corruption investigation.

However, the press councillor at the Portuguese embassy in London denied the allegations. "The courts are independent of the executive power in Portugal," he said.