This is a transcript of a programme broadcast on Radio 4 on 8 August 2004. It must not be reproduced without permission

Part One - To Kill the King - the Rise of Nicolas Sarkozy

These are the dog days of summer. Days of truce in French politics, days in which all Paris goes to the country. Last weekend a Parisian newspaper headline reported a traffic jam 650 kilometres long. Dog days because the heat of summer coincides, with the appearance in the night sky, of the Dog Star Sirius, which rises and falls with the sun in August. The Romans called this time Dies Caniculares - Days of the Dog - from which the French take their word for heat wave - canicule.

We are approaching a canicular anniversary of an event that France still recalls with horror and disbelief. Last summer there were six weeks of intolerably hot weather. By the end of July doctors in the city's hard-pressed accident and emergency departments were screaming for help. Elderly people were dying in far greater numbers than usual, they warned. The health minister said it simply wasn't true and, like everyone else, went on holiday.

Then something catastrophic happened. In the second week of August, Paris suffered three consecutive nights in which the temperature never fell below 26 degrees Celsius. Beware the dog days. For the old and infirm, intolerable temperatures during the day are less threatening if there is some relief at night, when the body can recuperate during a good night's sleep. These three days pushed many over the edge. Finally the government declared a public health crisis put into operation an emergency plan. On the day it came into force, the heat-wave ended. The temperature plummeted and Paris breathed again and slept through the night.

But when they did the sums they found that twelve and a half thousand mostly elderly people had been killed by the heat.

Maybe I am wrong, but I found it hard to imagine a similar event in Britain without at least some show of ministerial accountability. No-one resigned from the government. The health minister blamed senior officials for failing to keep him informed. President Chirac came home from his holiday in Quebec and blamed society. Young people should take more care of their elderly relatives, he said. France, after all, cares more about the family than any other nation in Europe.

But the dog days of last summer profoundly shook France's sense of itself, and the political ramifications are still to be felt.

I went to see Dr Patrick Pelloux, the Parisian traumatologist who had raised the alarm in early July and who had been ignored by the country's political elite. He hung his head. "We laughed at the British when they had their flu epidemic a few years ago" he said. "We saw that their health system was on its knees and could not cope and we took it for granted that that could not happen in France. Well it did happen."

It struck me that the dog days of summer had revealed two things about France which the French seem profoundly unwilling to acknowledge. The first is that there is a certain complacency in the popular assumption of French superiority. The second is that their health service - ranked the best in the world by the World Health Organisation - is not all its cracked up to be. It has flaws that many health care professionals believe might soon bring it crashing down.

And the biggest of these flaws is cost.

France - with roughly the same population as Britain - spends probably 30 per cent more on its health care. They don't even have a term for waiting lists since these are popularly supposed not to exist. The French are by far the greatest consumers of pharmaceuticals in Europe. One general practitioner told me of the waste that this involves. "If a man comes to see me because he thinks there might be something wrong with is heart, I will send him immediately to a cardiologist. The cardiologist will conduct the tests he needs. If the cardiologist finds there is nothing wrong with his heart, he will probably go to a second cardiologist, who will conduct the same expensive tests, and draw the same conclusions. The man will then go to a third, a fourth, even a fifth until he finds a cardiologist who is willing to prescribe him some drugs."

Pity help the politician who threatens to come between the French health service user and the pills he thinks he needs.

And that is why French politics is suddenly so electrifying. Because France, at last, has just such a politician. Arrogant, articulate, ruthless, solitary, populist, ambitious, indeed driven, and focussed to the point of obsession, Nicolas Sarkozy, Minister for Finance is the de facto leader of France's opposition - and he opposes, loudly, audaciously, and on the front pages of the country's newspapers every other day - from within the government.

President Chirac once described him as "intolerable but indispensable". Chirac is said to despise Sarkozy, but to have acknowledged that he cannot do without him. Sarkozy is the only public figure whom the President routinely addresses in the informal tu form, rather than the more common, and respectful, vous. It is a nuanced, very French, betrayal of Chirac's contempt.

And in this relationship contempt is a two way street. Sarkozy has said openly and publicly and whenever the opportunity presents itself, that Chirac is a man of the past, that it is time for him go gracefully. Comparisons are often made between this rivalry and that of Tony Blair and Gordon Brown. But the Chirac-Sarkozy duel is played out in public. On television. In one recent interview, Sarkozy was asked "Is it true that when you are shaving in the morning you imagine yourself as President of the Republic?" And he answered without a moment's hesitation or a hint of shame "Not only when I'm shaving". Can you imagine Gordon Brown saying that? Sarkozy's ambition is naked. Most French ministers confine themselves to their offices and seldom seek the limelight. They think of themselves as a meritocratic elite whose claim to office derives from their training and experience rather than their democratic credentials. It is said of most that they would not make waves if they fell out of a boat.

Sarkozy makes waves. He is an outsider. Like Margaret Thatcher, to whom he is frequently compared, he does not come from within the comfortable and incestuous circles of the French governing classes. He did not go the elite Ecole National d'Administration, or ENA. The ENArques, as they are known, are simultaneously contemptuous and frightened of him. He is not, in the parlance of the Thatcher years, "one of us". He seems not to know the rules by which this elite operates. He is driving a coach and horses through the finely balanced codes of French political practice.

And the sentiment that fuels his rivalry with Chirac is visceral. In the 1970s, Chirac, already prime minister of France, adopted the young Nicolas Sarkozy as a political son. Old black and white photographs of the two men show a short, open faced boyish figure at the elbow of the great man, loyal, devoted, knowing his place.

Sarkozy built his political power base in the wealthy Parisian suburb of Neuilly sur Seine, when, at the age of 28, he became France's youngest mayor. To win the post he had to betray a friend and patron who was the favourite to win the job - but the unfortunate man was in hospital when the nominations opened and Sarkozy manoeuvred himself into place. Chirac is said to have laughed with delight at his young protege's skilful treachery.

When Chirac ran for President in 1995, Sarkozy backed his right wing rival Edouard Baladur. Chirac did not laugh at this treachery. Sarkozy has never been forgiven.

And that might well account for why he finds himself in charge of France's economy. That is what is said here in France - that Chirac has handed him the economy to destroy him, to remove him as a threat in the run up to the presidential election of 2007.

France has not balanced its budget in twenty three years. It is not just the huge cost of the excellent social services, of which the health service is the centre piece. It is also that the French economy is not generating the wealth it needs to sustain than excellence. France is living beyond its means. The French middle class lives well. They have job security. They have long lunches. They have long holidays. They are able to spend more time with their children. They look across the channel in horror at the working hours their British counterparts have to put in. They eat well. They buy their food fresh on the day they plan to cook and eat it. They have the lowest child obesity rate in Europe, because their children don't eat rubbish. They are very superior indeed about their savoir-vivre. Their work-life balance is to their liking.

And on top of this they have social welfare. The state provides.

But they are sending the bill to their children and their children's children. Future generations will inherit the debt. And that is now Sarkozy's pre-occupation.

One of the fault lines running through French society is the resentment that exists between workers in the state sector, and the entrepreneurs who run France's private businesses. The private sector complains of a deeply rooted French suspicion towards private enterprise. One Scottish man I know, who started a small manufacturing business in the south of France, told me of the problems he faced in starting up. The French state, he said, treats you like a criminal when you run your own business.

In Britain the economic orthodoxy shared now across the political spectrum is that if you want to grow your economy you create the conditions in which small and medium sized businesses can thrive. France believes still in the role of the state and in scale. The construction giant Alstom - seen here as a French champion - is a major loss maker. But its survival is non-negotiable. The French tax payer will pick up the bill for its enormous losses.

In Britain we rightly applaud the quality of the French railways. But when I buy a ticket to travel from Paris to Bordeaux, the price I pay is only perhaps half the real economic cost of my journey. The French tax payer obligingly pays the rest - or rather, their children will, eventually.

The problem for French entrepreneurs is that it is extremely difficult for a small business to grow into a medium sized one. France's highly developed system of social security imposes heavy burdens on employers - they become responsible for much of the security that the workforce enjoys - holidays, pension rights, sickness benefits, job security. This leaves a yawning gap in the topography of the French economy - the small business sector is fine and diverse - with family run shops and restaurants still dominating high streets which, in Britain, have long since fallen to the big chains. And the corporate sector, the big employers, like Alstom and Aventis, and the car manufacturers - and nothing, or at any rate very little, in between.

French governments have triedin the past to tackle this - most notable that of Alain Juppe, President Chirac's first Prime Minister in 1995. His attempts at structural reform brought the country to a standstill because of the power of the trade unions to mobilise France's cultural antipathy to the idea of the market. The Juppe government backed away from the reform it had promised and at the parliamentary elections, the French returned the socialist party to power under Lionel Jospin, which introduced the 35 hour working week in the expectation that it would somehow create more jobs. Unemployment in France is now nudging ten per cent.

There are roughly the same number of French people living in Britain as there are British people living in France. But the demographic profile of each expat community is revealing. By and large, British people come to live in France when they have made their money and are looking for somewhere peaceful to build a second home. Their contribution to the economy is what they pay local tradesmen or what they spend in the local shops. The French in Britain tend to be much younger. They go to Britain to work, or to start businesses, or because they cannot find a job in France.

The problem, as one prominent businessman put it to me, is that there has been no stomach for reform among France's political elite, even when the right has been in power - and that this goes to the very top. "Our difficulty" he said "is that the leader of the French right - President Chirac - is in reality a man of the left".

This is the great paradox of Gaullism. For president Chirac, who remembers the Second World War and the trauma of occupation, national unity is a sacred principle. Social cohesion matters more than anything. Whatever the cost, the French must not be divided against themselves. And it is this fear internal division which, all too often in France has found violent expression, that has acted as so powerful a brake on the kind of change that many on the French right believe the country needs.

And this is what makes Sarkozy so strikingly different. He speaks warmly about the anglo-saxon economic model. He admires Tony Blair and Gordon Brown and says so. He admits to being fascinated by America. He wants, he said in a newspaper interview last week, to reconcile the French people to the idea of success.

He is taking on powerful forces. Millions of state employees who are quite successful enough. And a cultural predisposition that values quality of life over the endless pursuit of more and more wealth. A country that will go to the barricades rather than surrender what it feels to be its entitlement. A country that does not want to be reconciled to the kind of success they associate with materialist values of the United States.

There is also the question of whether the French will elect so stark an outsider. Sarkozy - the name isn't even French. He is the son of an exiled Hungarian aristocrat and a Greek mother. For the presidency of the republic is more than a political office. It is the embodiment of the nation, the inheritor of the French mission in the world, and the personification of what de Gaulle called La Gloire.

One of Sarkozy's biographers says this. "Go down to the Place de la Concorde, one of the most beautiful and arresting urban spaces in Europe. Here the French people cut off the head of their king and they have always regretted it a little. Sarkozy should remember that France is a monarchical republic. Only the people can kill the king. If an ambitious baron rises to become an assassin, the people will turn on him."

But if he is successful, if he can reconcile the French to the idea of success, he has the potential to turn history, to redefine France and its role in the world, to position it more closely to the atlanticist sentiments of Britain, to become - and this is huge - France's first genuinely post-Gaullist leader. No wonder Chirac wants him stopped.