World Focus: Political exiles line up to take on Sarkozy

Two spectres from the past are haunting President Nicolas Sarkozy, a man who claims to care only about the future.

The French government reshuffle last weekend was supposed to seize the political initiative and strength the president's feeble grip on popular opinion. Instead, it has reopened divisions in the fractious middle ground of French politics which could handicap his chances of re-election in 2012.

At the same time, a murky and long-submerged saga involving submarine sales to Pakistan in the early 1990s, when Mr Sarkozy was budget minister, threatens finally to surface as a full-blown "affaire d'état", or political scandal.

With the centrists largely excluded from a new cabinet dominated by the "ex-Gaullist" wing of the ruling centre-right party, there were moves this week to create a "coalition of the middle" to challenge for the presidency in 17 months' time. This would shrink Mr Sarkozy's potential score in the first round of the two-stage election in May 2012 and could help the Socialist challenger (yet to be identified) to seize a decisive lead.

The threat is real. Even Le Figaro, which backs Sarkozy, predicted in an editorial this week that the president might be forced to reshuffle his government again early next year to bring in a "centrist" prime minister.

President Sarkozy lunched yesterday at the Elysée Palace with the man who would be most likely to fulfil that role, the former environment minister Jean-Louis Borloo. After being widely tipped to become prime minister, only to be ditched in favour of the incumbent, François Fillon – a man he detests – Mr Borloo flounced out of the government on Sunday afternoon.

President Sarkozy was also due last night to meet another disgruntled centrist leader, the former defence minister, Hervé Morin, who was fired on Sunday in what is now widely seen as a badly bungled reshuffle.

Mr Morin and Mr Borloo lead different factions of the French "centre", which feels itself to have been used, and then abused, by Mr Sarkozy and the dominant "Gaullist" wing of the ruling Union Pour un Mouvement Populaire (UMP). They are said to be in discussions with two other movements, which have always hated the President.

The first is the Mouvement Démocrate, the rump of the old centrist federation, the UDF, led by François Bayrou, the former education minister who has always steadfastly refused to join, or ally with, the UMP. The second is an alternative Gaullist movement started earlier this year by the former prime minister Dominique de Villepin.

The mistrust, if not hatred, between these centrist or centre-right factions is almost as intense as their desire to do down the UMP and the President. It remains to be seen which instinct will triumph.

President Sarkozy has also been haunted this week by "Karachigate" – the allegation that he was involved in "kick-backs" on a large French submarine contract for Pakistan in 1994.

For two years, French magistrates have been investigating claims that the murder of 11 French submarine engineers by a bomb in Karachi in May 2002 was carried out not by Islamic terrorists, as claimed at the time, but on behalf of the Pakistani establishment in retaliation for the non-payment of €80m in "commissions".

This week Charles Millon, who was defence minister in 1995, confirmed that the payments had been stopped by Jacques Chirac, then President, because kick-backs were suspected. The families of the dead engineers called yesterday for the investigators to question Mr Chirac, Mr Balladur – and President Sarkozy.