Collor in ordeal by television

BRASILIA - President Fernando Collor de Mello faces the sternest test of his two-year-old presidency today: a television broadcast in which he has to convince the nation he is innocent of corruption. If he fails, he risks the slow death of his government.

A spokesman at the presidential palace confirmed that Mr Collor would speak late last night, to deny fresh charges published last weekend. The allegations sent the nation's stock markets crashing because they appeared to forge a direct link between the President and Paulo Cesar Farias, Mr Collor's former campaign treasurer, who is under investigation for selling favours and stealing government money.

The report, in the Isto E weekly news magazine, was especially damaging because the evidence produced so far to a congressional panel investigating the scandal had implicated Mr Farias rather than Mr Collor.

Isto E printed a photocopy of a cheque made out in February to the President's wife, Rosane, for 3,000,000 cruzeiros ( pounds 1,000) drawn on a secret bank account operated by Mr Collor's personal secretary, Ana Maria Acioli.

The magazine then interviewed the secretary's former driver, Francisco Eriberto Freire Franca, who said Ms Acioli's bank account was topped up with injections of cash from Mr Farias.

The congressional inquiry committee decided on Monday to interview both Freire Franca and Ms Acioli and to seek authority to investigate the latter's private bank accounts.

Newspapers reported that Mr Collor's main political allies, the right-wing Liberal Front Party, were waiting to see how convincingly the President rebutted the charges before deciding whether remain in government.

But one Brazil's top-selling newspapers, the Folha de Sao Paulo, delivered its own verdict without hesitation. 'Resign now', it told Mr Collor in a front-page editorial. 'We have in the presidency of the republic, a man who is cornered. Society no longer trusts his words. It does not expect anything more from the president. Nothing, that is, except his resignation'.

An opinion poll carried out by the same newspaper last week - before the latest allegations - found that 65 per cent of respondents in Brazil's biggest city, Sao Paulo, thought President Collor was involved in corruption, but only 32 per cent wanted him to go.

Mr Collor has repeatedly denied that he authorised Mr Farias or anyone to act illicitly in his name and has insisted that his presidency has been characterised by the highest ethical standards. But a parade of witnesses before the congressional inquiry has contradicted the president, saying that 'PC', as Mr Farias is universally known, was acting on Mr Collor's behalf.

The powerful Rio daily O Globo - part of the media empire which helped elect Mr Collor - carried a front-page story yesterday, saying its reporters had checked telephone company records and discovered that Mr Farias made dozens of calls to the highest organs of government, including the presidency.