His Highness's serenity disturbed by stamp fraud

French magistrates wish to interview Prince Rainier of Monaco as part of a two-year investigation into a suspected pounds 25m fraud, in France, involving special issues of postage stamps by the tiny principality.

The investigation is aimed at unscrupulous stamp dealers in France, not at the prince, who would be, in any case, outside the reach of French law. The examining magistrates are said to want to ask, among other things, why cheques signed by one of the suspects were allegedly made out to "His Serene Highness, the Prince of Monaco".

The investigation began with complaints from French pensioners, who said that they had been persuaded to invest in entire sheets of special issues of Monegasque stamps at Ff1,000 (pounds 110) a time. The buyers were told that the sheets were limited in number and would grow in value. In fact, so many thousands had been printed by the Monaco authorities that they were philatelically and commercially valueless.

One unfortunate buyer is believed to have spent nearly pounds 1m on the sheets. He was not among those who complained to the police - suggesting to the investigators that he was, himself, trying to launder money or hide earnings from the French tax authorities.

There is no suggestion, at this stage, that anyone within Monaco was aware of the fraud. But the sheer scale of the trade - and the large profits to the principality - have startled the investigators, both gendarmes and examining magistrates, in the Cote d'Azur region, which surrounds Monaco.

According to information leaked to Le Parisien newspaper, the Monaco authorities paid five francs for each sheet of stamps, produced for them by the French national printing press. The sheets were sold by the principality to a French dealer of Iranian extraction at Ff200 a time - a profit of 4,000 per cent (the payments apparently going directly to the prince). The sheets were then sold on to another dealer at Ff400 each and, finally, to collectors for Ff1,000.

The magistrates' request for an interview with Rainier must first be approved by the French foreign ministry - which in effect runs the civil service of the principality.

The final decision on whether to allow the investigators access to Monaco will rest with the prince himself, who is celebrating his family's 700th year on the throne.