AT 73 and in the final months of a 12-year presidency, Jacques Chirac should be contemplating a comfortable retirement as a respected elder stateman.

Instead, he finds himself beset by scandal, presiding over a feuding and paralysed Government, and an object of widespread derision. In Paris, as in London, there is a pervasive smell of political decay.

In an apparent act of desperation, M Chirac made a rare television appearance after a Cabinet meeting yesterday to try to extract Dominique de Villepin, his Prime Minister, from a dirty tricks scandal and rebuff reports that he himself had held £30 million in a Japanese bank account. “The Republic is not a dictatorship of rumours, a dictatorship of calumny,” he said.

But even as he did so the so-called Clearstream affair claimed its biggest victim yet — Jean-Louis Gergorin, a vice-president of EADS, the FrancoGerman parent of Airbus, who was a former colleague of M de Villepin in the Prime Minister’s earlier career as a diplomat.

The President’s belated intervention did little to dispel the impression that his administration was near anarchy with a discredited Prime Minister locked in combat with his No 2, Nicolas Sarkozy, the Interior Minister and leader of the Union for a Popular Movement party.

The Socialist Opposition tabled a no-confidence motion in the Government. Its leader, François Hollande, said that the Government had become an international laughing-stock and that “in a normal democracy, de Villepin would have been out a long time ago”.

Libération, the left-wing daily, said: “This is no longer a Government. It is a raft which has been drifting for weeks along the coast of discredit.”

The Prime Minister’s authority has been shredded by the rejection of his labour reforms, and successive disclosures in the Clearstream affair — a tale of skullduggery involving spies and high civil servants.

The disclosures concern his apparent role in a 2004 campaign to smear M Sarkozy with a fake list of alleged bribe- takers. The list, proven to be fabrication, alleged that M Sarkozy banked bribes from defence contractors allegedly paid through Clearstream, a Luxembourg finance house.

M Chirac dismissed the affair as a witch-hunt driven by rumour, and insisted: “I have every confidence in the Government of Dominique de Villepin to conduct the mission I have entrusted him with.”

The Elysée Palace also dismissed as a fabrication a related report of an illicit Chirac bank account in Japan. The alleged account was said to have been mentioned by General Philippe Rondot, a spy chief, to judges investigating the Clearstream affair and leaked to the media in a further manifestation of the poisonous political atmosphere in Paris.

Though he is now fighting for survival, M de Villepin set off for a long-planned dinner meeting with Tony Blair in London last night, declaring that France was not interested in “media soap opera”.

M de Villepin and M Chirac are banking on the public’s boredom with the murky Clearstream affair, especially as the World Cup and summer holidays approach. Polls show that only about 35 per cent believe M de Villepin should go.

By tradition, the President would have imposed his authority by replacing M de Villepin after he bungled a labour reform this spring. In practice, M Chirac has to stand by his loyal steward because he is the only viable centre-right challenger to his adversary, M Sarkozy, in next year’s presidential election.

M Chirac tried to rein in M Sarkozy yesterday, telling his ministers to focus on their jobs. “Of course there is the outlook of elections exciting individuals, but the presidential election is a year away. Right now it is governance that is needed,” he said.

But M Sarkozy, 51, continues to exploit the Clearstream affair to boost his campaign. In open mutiny against M Chirac and M de Villepin, he lacerated the Prime Minister in a speech on Tuesday. “I do not accept being associated with the dirty tricks of apprentice conspirators,” he said.

Two investigating judges are trying to trace the author of the list containing the alleged bribe-takers and the person who sent a copy anonymously to the authorities.

The plot thickened yesterday when M Gergorin was relieved of his duties at EADS in order to “defend himself”, after it emerged that he was in possession of the Clearstream “list” in 2003 and disclosed it to Renaud Van Ruymbeke, a senior investigating judge.

DIRTY TRICKS AND DISCREDIT: WHAT THE COMMENTATORS SAY

‘There is no Government any more. No initiatives are possible. All action is bogged down in mutual suspicions. Every day it is sinking further’

François Bayrou, leader of the centre-right Union for French Democracy (UDF)

‘The sorry spectacle we are providing for the world is enough to send France to despair . . . destabilised by the excesses of a political system that has run out of steam, undermined by dirty tricks and manipulation’

Le Figaro

‘This is not a Government any more. It is a raft which has been drifting for weeks along the coastline of discredit . . . dragging with it a whole country, mocked by foreigners and overwhelmed by moral decay’

Libération

‘Chirac has demonstrated to the point of nausea the impotence of the armoured presidential office (of the Fifth Republic), the conquest of which obsesses politicians and feeds scandal’

Le Monde

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