Bailout: a "good deal" has been struck

A proposed deal has been struck in Lisbon with Portugal's caretaker government for a three-year bailout loan worth just short of €80 billion.

It's a good deal, trumpeted José Sócrates last night. “This is a deal that defends Portugal,” said the prime minister who resigned when Portugal had no alternative but to seek outside help. The terms would be less onerous than those set for Greece and Ireland, he said. (Sócrates is pictured here with his finance minister, Fernando Teixeira dos Santos, announcing the deal).

If accepted by other parties here and within the EU, the bailout plan will rescue Portugal from bankruptcy. Any rejoicing will be short-lived, however.

The nitty-gritty has not yet been revealed, but the plan is likely to include tough conditions that many already hard-up people in one of Europe's poorest countries may find crippling. Those who have been hit in recent months with harsh austerity measures may be clobbered again with further tax rises, pay and pension cuts and less welfare entitlements.

Over the past three weeks, negotiators representing the International Monetary Fund, the European Central Bank, the European Commission and the Portuguese state have been faced with awkward deadlines. European finance ministers set a target date of May 16  for final Europe-wide approval of any plan. Meanwhile, campaigning is underway for a snap general election on June 5. Also in June, debt repayments amounting to some €7 billion fall due.

Portugal has got itself into this mess because of pathetic annual growth levels which have driven it deeper and deeper into debt. Recession looms this year and next.

So, have we reached a moment to take stock and contemplate? Portugal's civil servants don't think so. “It's time to fight,” says Ana Avoila, head of Portugal's Common Front of Civil Servant Unions. Schools, hospitals, courts and most public offices are expected to be disrupted by a national strike of civil servants planned for this Friday.

Portugal congratulates United States on the killing of Osama bin Laden

Luis Amado, Minister of Foreign Affairs in the Portuguese caretaker government, has issued a statement congratulating the United States for the “success of the mission that caused the death of Osama bin Laden.”

The statement noted that it was the culmination of almost a decade of determination by the American people and their allies “to fight terrorism and fanaticism that have caused so many innocent victims.”

The Portuguese foreign ministry statement continued: “This fight is not against Islam that has also been the victim of cowardly attacks that so cruelly reap countless lives and force people to live in a climate of insecurity and terror, only contributing to the destabilization of the world.”

Amado echoed others in warning that the death of bin Laden does not signal either the end of Al Qaeda or of terrorism committed by extremist Muslims. “It is necessary to maintain the same spirit of cooperation and determination to defend our principles and values of tolerance and peaceful coexistence,” he said.

While bin Laden's death is temporarily dominating the main headlines in Portugal, the country's bailout remains the number one national issue. No decision has yet been made on the rescue package.

The eurosceptic True Finns are still grumbling on the sidelines but Klaus Regling, the head of the European Financial Stability Facility, is being quoted today as saying that no country will veto the bailout plan. “We can imagine a country abstaining, but a veto is impossible,” he said in an interview with a French newspaper.

Crisis and chaos - but who's in charge?

Portugal and Finland are far apart in most ways but they have at least one thing in common: neither has a proper government at present. This is causing further confusion to the already contorted EU financial crisis that is bordering on the farcical.

The good news is that fears of a Finnish veto on Portugal's bailout hopes seem to have subsided somewhat in the aftermath of the True Finns' euphoria at the weekend. A couple of friendlier faces have come to the fore.

After finishing a surprisingly strong third in Finland's general election, the leader of the anti-euro True Finns party, Timo Soini, vowed to overturn the European Financial Stability Facility (EFSF) under which Portugal will be offered a rescue package amounting to some €70 billion.

An EFSF agreement would require the unanimous approval of all eurozone members, including Finland. The True Finns want no part of it.

Said Mr Soini indignantly about the EU's plans for Portugal: “Of course there will have to be changes. The package that is there – I do not believe it will remain.”

Mr Soini's right-wing threat to scupper a deal with Portugal has been offset by the views of Jyrki Katainen, leader of the National Coalition party which won the most votes in Finland's election. As the most likely next prime minister, he says it would not be possible for Finland to demand big changes to the Portugal bailout package. Small ones maybe, but not big ones.

Mr Katainen is all geared up for protracted talks to form a new government that may include the True Finns. But the parties will have to reach some sort of compromise agreement, over the proposed Portugal bailout among other matters. Yesterday, Mr Soini said he would not set absolute conditions for joining a new coalition, yet he was adamant about his opposition to the present Portugal bailout plan.

The second strongest Finnish party, the Social Democrats, support EU policies in general and are not as fiercely opposed to a Portugal bailout as the True Finns, but they are not entirely happy with what is envisaged and may demand extra conditions.

Meanwhile, Finland is being run by a caretaker government. Before the election, the outgoing Finnish Prime Minister Mari Kiviniemi said a caretaker government in her country could approve a rescue package for Portugal. She has now changed her mind. She now believes the Portuguese bailout is so important that it can only be approved by the next properly constituted government in Finland.

Portugal is currently being run by a caretaker government as well. Representatives of the European Commission and the International Monetary Fund are beavering away in Lisbon to come up with a bailout blueprint as soon as possible, hopefully by mid-May. But Portugal won't have a proper government until after the next general election on 5^th June. The latest opinion poll suggests it could result in a dead-heat between the centre-right Social Democrats and the centre-left Socialists, thus adding to the country's political uncertainty. To cap it all, just days after the election Portugal will face a major debt redemption.

Finland and Portugal on collision course from opposite ends of the EU

The gentleman on the right is currently Portugal's public enemy number one. His name is Timo Soini and he lives 3,000 kilometres away, in Finland.

Few people in Portugal knew much about Finland, even less about Timo Soini, before they very recently emerged as potential wreckers of this country's economic future. Everyone associates Finland with reindeers and they in turn are often linked to expressions of goodwill and generosity of spirit. Those don't seem to be obvious characteristics of Timo Soini. He's into antlers, though.

As founder and current leader of the anti-euro True Finns political party that did remarkably well in Finland's general election yesterday, 48-year-old Soini has pledged to do everything he can to stop Portugal getting the EU bailout it so desperately needs.

Portugal's request for help became a central issue in the final days of the election campaign. Finland is the only eurozone country in which bailouts have to be approved by the national parliament.

Having more than quadrupled its share of the vote, Soini and his True Finns party hope to be part of Finland's next coalition government. That could complicate if not quash Finland's traditional pro-EU stance.

Meanwhile, representatives of the European Commission, the European Central Bank and the International Monetary Fund are already in Lisbon to set the terms for a bailout, the third after Greece and Ireland.

They will be getting down to the nitty-gritty this week to draw up a radical economic reform plan, which is expected to include privatisations, changes in the labour market and steps to shore up wobbly banks. By the middle of next month they should have a comprehensive blueprint.

To be implemented, this must first be unanimously approved by all 17 eurozone members, including Finland. Frustration in EU countries about footing the bill for weaker economies is not confined to Finland, of course. A couple of weeks ago when it looked like British taxpayers might have to put their hands in their pockets to help Portugal, many of them openly moaned – and Britain is supposed to be Portugal oldest ally!

However grudgingly, the other EU countries will back Portugal's rescue package. Finland is the only doubtful one. Timo Soini is hoping to scupper the deal.

The True Finns, right-wing, anti-immigration nationalists, are now the third largest party in Finland. The second largest party, the Social Democrats, aren't keen on bailouts either. If these two parties unite to out-vote the largest parliamentary group, the National Coalition Party (NCP), Europe's single currency could be plunged into a new crisis.

Finland is way up there next to Sweden, Norway and Russia where the sun don't shine - not much anyway. It is the EU's most sparsely populated country with less than five and a half million people, but they are among the most economically competitive and socially advanced and contented people on the planet.

True Finns don't have much time for under-performing, lesser mortals down in the far south. They expect the EU to change its plans about rescuing Portugal.

"The party is over," says Soihi. "Why should Finland bail anyone out? We won't hand over more Finnish money to be burned in the fire."

That sounds sort of final, but there is another more hopeful scenario. The True Finns are expected to join talks this week on forming a coalition with the NCP. But they may only be accepted into a new coalition government if they agree to compromise on certain EU issues, including Portugal's bailout request. If they do not agree to compromise, the NCP will try to build a consensus without them and Finland's pro-euro stance may prevail.

Viewed from down here in the sunny south, it's all a bit iffy.

Recollections: José Pearce de Azevedo

For 35 years the British Foreign & Commonwealth Office was able to rely on the complete discretion of their man in the Algarve, the charismatic Dr José Manuel Teixeira Gomes Pearce de Azevedo, OBE. Ten years after his retirement and now aged 80, he has agreed to tell for the first time some of his hitherto confidential experiences.

What he has revealed here is unlikely to alarm Whitehall or be the envy of WikiLeaks, but nonetheless it is a fascinating and often amusing insight into the work of a man who was long the doyen of the Algarve consular corps. As such he rubbed shoulders with members of the British royal family, leading politicians and assorted celebrities – as well as ordinary law-abiding expats and serious villains.

The ever gregarious and convivial 'Joe', as he has always been known to close friends and colleagues, had the advantage of a pedigree that made him eminently suitable for the job of representing Great Britain here. He is the grandson of Portmão-born Manuel Teixeira Gomes, who served for thirteen years as Portugal's Ambassador to London. As Portugal's first envoy in the UK after the abolition of the monarchy in this country, he presented his credentials to King George V in 1911. Teixeira Gomes went on to become the seventh President of the Republic from 1923 to 1925. (The picture here  shows Joe with a photograph of his grandfather in the Portimão Museum).

Both Joe's father and paternal grandfather had served as vice-consuls in the Algarve. He followed in their footsteps by being appointed vice-consul in 1965 at the age of 35. In 1974 he became full honorary consul. His wife, Zefita (pictured below with an orphaned child), officially joined him as pro-consul in 1983 and they served together in the consulate in Portimão until their retirement in 2000.

They were at the British Embassy in Lisbon together during a state visit by Her Majesty Queen Elizabeth II when the monarch left a crowded room to visit another part of the Embassy building. Joe recalled how Prince Philip then entered the room, glanced around and caused great mirth among diplomatic staff by asking in a loud voice: “Has anyone seen my wife? Where is she?”

At another official function in the Embassy, the Prince of Wales and Princess of Wales questioned Joe about the tie he was wearing. It bore a crest featuring three white ostrich plumes, the emblem of Wales. There were two small initials below the plumes. Pointing to them, Joe told the bemused heir to the British throne: “Your Royal Highness, the C is for Charles and the D is for Diana.”

Sarah Ferguson, the Duchess of York, came to the Algarve on a private holiday with her two young daughters the summer after she was famously photographed topless and having her toes sucked by a male American friend. Fergie, Beatrice and Eugenie stayed in a private villa near Lagos. At the end of their stay, paparazzi gathered at the front gates of the villa hoping to photograph the trio leaving, and then follow them to Faro Airport.

A car containing five people shot out of the gates and sped eastwards along the main road towards the airport. The Portimão police chief in full uniform was clearly visible in the front passenger seat, but the three people in the back were much less visible. With the paparazzi in hot pursuit, the get-away car keep going as far as the Penina Hotel on the outskirts of Portimão. There it turned sharply left and headed northwards along a minor road towards the hills. The paparazzi duly swung left and followed.

Ten minutes after the first car and the paparazzi had left the villa, a second car departed rather more sedately. With Fergie and her two daughters at ease in the back seat, this second car drove all the way along the main road to Faro Airport without anyone taking the slightest interest. The three people in the back seat of the first car were police officers. The driver, the man who had devised the successful ruse, was none other than Dr José Pearce de Azevedo, OBE.

The OBE was awarded in 1977, though Joe was not quite sure then what he had done to merit it. He still isn't - though he suspects it had to do with his consular work in the aftermath of the 1974 Portuguese Revolution. This, admits, Joe was the most difficult period of his tenure as consul.

Some worried British expatriates withdrew from the Algarve, at least temporarily, during the turbulent post-revolution period. Among them was the golf legend, Sir Henry Cotton, a close friend and frequent golfing partner of Joe's. To help allay feelings of insecurity among those who stayed, Joe set up an information network by dividing the region into six areas and appointing a prominent expat in each to liaise with the consulate in Portimão. Joe knew key officials such as Major Branco, head of the military forces in the Algarve. He was thus able to brief and relay information between administrators and the British community, whom he liked to refer to as his 'parishioners'.

During this period, Joe had several meetings with the British Ambassador, Sir Nigel Trench. One day Sir Nigel mentioned that when he was appointed ambassador to Lisbon people remarked about how lucky he was because Portugal was the right place to retire to. “The revolution broke out as soon as I arrived. It couldn't be any better!” declared Sir Nigel.

Always a busy man, in addition to working for the Foreign & Commonwealth Office Joe served as the first President of the Algarve Tourist Board. He was also head of the Portimão port authority. Not only did all this demand long hours in the office, it also involved frequent working lunches, cocktails parties and dinners. On one such occasion, Joe was able to informally introduce Jack Eden, the British Consul in Lisbon, to the then iconic President of the Portuguese Republic, Mário Soares (pictured above with Joe). It wasn't a formal official occasion; the consuls and the president just happened to be eating in the same restaurant at the time. On meeting Jack Eden again a few days later, Joe held out his hand but Jack refused to shake it saying: “I haven't washed my hand since meeting the President!”

Joe was on close terms and went out of his way to give personal help to visiting politicians, including the likes of Sir Geoffrey Howe, Margaret Thatcher's longest-serving cabinet minister, and Duncan Sands, later Baron Duncan-Sandys, a minister in successive Conservative governments and sometime son-in-law of Sir Winston Churchill.

Another top Thatcherite politician and his wife, whom Joe declined to name, visited the Algarve but were not in their villa when he arrived to greet them and give them a box of Dom Rodrigo cakes, a delicious Algarvian confection. The only person on the property was the gardener, so Joe gave the gift to him, asking him to pass it on to the 'lady of the house' and say it was from the British Consul. The 'lady of the house' must have been well pleased because Joe had gone to the wrong address.

On meeting the top Thatcherite the following day, the politician pompously told Joe that he should be 'more careful' about the address because he did not want people to know his whereabouts. Joe was able to point out that he had gone to the wrong address because it had been incorrectly communicated by the politician's own office in London. Some days later the same MP phoned Joe to say a red briefcase full of documents had been stolen from his holiday villa. Joe set in motion steps to find it. He was successful. The briefcase had been broken into, but it was returned to its owner - with a rope around it to stop the contents falling out.

After paying a courtesy call to a Chief Whip of the Labour party who was staying at a top Algarve hotel, Joe asked the politician if he wanted any message passed on to a visiting Tory cabinet minister with whom Joe was having dinner in a somewhat less salubrious hotel that evening. “Consul, please convey my good wishes to the minister, but not my affection,” said the Labour man. When Joe did so, the Tory asked which hotel the other was staying in. On being told, the minister remarked: “Always the same; Labour in five-star hotels, Conservatives in four.”

Joe was asked by another unnamed MP to persuade apathetic local authorities to connect his villa near Cape St Vincent to mains electricity and water supplies and install a phone line. “I promised to do my best but said nothing was assured as I wasn't God,” Anyway, strings were pulled and the connections were made with such speed and efficiency that the MP felt moved to tell Joe in a letter that he may not be divine, but his influence had been miraculous, on a par with Moses' role in the parting of the Red Sea. The MP said Joe had made it possible for him to “toast my loaves and grill my fishes.” In gratitude he promised to be Joe's “evangelist” in parliament in London. Later, when Joe wrote asking for specialist advice on a certain matter, the “evangelist” didn't even send “Moses” a reply acknowledging receipt of his letter.

Cherie Blair, on the other hand, sent Joe not only a kindly-worded letter, but also a photograph of the whole family standing outside No 10 Downing Street immediately after husband Tony's victory in the 2001 British general election. It was by way of appreciation for a small gift and a helping hand on meeting her with baby Leo in her arms at Faro Airport at the start of a holiday visit staying at Sir Cliff Richard's home near Guia.

Many years earlier, when Joe first encountered Cliff, the pop singer was famous but still young and unknighted. He owned a holiday home in Albufeira close to the town's cemetery. The location ensured peace and quiet. Rumours began circulating that the town hall authorities were planning to re-site the cemetery and replace it with a tourist complex. Cliff told Joe that if that happened, he would leave Albufeira.

It didn't happen and some years later Joe was on hand when the municipality honoured Sir Cliff by naming a street after him. When Sir Cliff was unable to attend a ceremony in the Algarve at which the Portuguese government awarded him a gold medal for his contribution to the country's tourist industry, Joe picked up the medal, along with a similar one for himself. He and Ambassador Roger Westbrook later presented Cliff with the medal in his new house near Guia.

In his early years working for the FCO, Joe was a Lloyds insurance agent. As such he was asked to do a survey of furniture belonging to a small, elderly woman called Mrs Grant who had a home on the outskirts of Lagos. After finishing his assessment, Joe said to this seemingly vulnerable little lady: “As British Consul may I give you a bit of advice? I believe it would be safer for you if you moved closer to Lagos.”

She looked him in the eye and said sternly: “If you knew who I was, where I have been and what I have done, you wouldn't dare to say that young man!”

The formidable Mrs Nellie Grant had been a pioneer settler in British East Africa. Joe met her again at a dinner party organised by a consulate colleague, Donald Armstrong, another ex-Kenyan colonial. Among the guests was Mrs Grant's daughter, Elspeth Huxley (pictured right), who contributed much to the dinner table conversation. A polymath, broadcaster, journalist, author, conservationist, political thinker, magistrate and government adviser, Elspeth had been brought up in Kenya and had written many fine books on colonial Africa, including The Red Flames Trees of Thika. She was a friend of Joy Adamson, who wrote Born Free and an acquaintance of Karen Blixen, author of Our of Africa. At the dinner - now that he was in the know - Joe and Nellie got on just fine.

Joe quietly used his good offices to further ecumenism by introducing John Satterthwaite, Anglican Bishop of Fulham and Gibraltar, to Júlio Tavares Rebimbras, Bishop of Faro and liaised in discussions on the shared use of Algarve churches. Although he mixed a lot with the great and the good, he had a down-to-earth view of his role. “As consul I thought I had to help citizens whenever they needed help, even with matters which at first sight did not seem to be the consul's responsibility.” To this end he was able to call on an array of private as well as official contacts.

Consular work brought Joe into direct contact with British citizens accused of committing serious crimes in the Algarve. He attended trials to see that justice was being done. From the public benches during a trial in a courtroom in Faro he respectfully interrupted proceedings on seeing that the defendant's official interpreter was a policeman. The presiding judge agreed but said the court had been unable to find an alternative. The judge welcomed Joe's offer to produce a suitably qualified person, which he did by immediately enlisting his private secretary at the tourist board office in Faro.

His stature among the legal profession was such that the presiding judge in a much publicised grievous bodily harm case in Albufeira told Joe of the 'not-guilty' verdict over lunch before announcing it in court. Another judge in a murder case confided some time later that he sometimes wondered if the tribunal's guilty verdict had been the right one.

Following the crash-landing of a Dutch DC-10 in severe weather conditions at Faro Airport in 1992, Joe went to the airport both as Consul and as President of the Algarve Tourist Board. Fifty-four of the 327 passengers and two crew members died and 106 people were badly injured in the crash. Nearly all were Dutch holidaymakers. Three of the passengers who had escaped injury had English-sounding names. They had been seen leaving the airport but their whereabouts was not known. Joe tracked them down to the Eva Hotel in the centre of Faro and found them in the bar. Never one to turn down a drink, Joe accepted their invitation to join them in celebrating their survival.

Having witnessed the bravery and skill of the emergency services fighting forest fires and rescuing people in the Monchique hills where many Britons had homes, Joe suggested to the Embassy that it would be appropriate to donate life-saving defibrillators to the bombeiros fire and ambulance volunteers. The Embassy agreed and Joe later handed them over to the bombeiros stations in Lagoa, Monchique and Portimão.

It was his quiet and genuine concern for ordinary citizens that distinguished him as a representative of the British government and why he was so well-known and held in high esteem. During a holiday visit to London he was watching the changing of the guard at Buckingham Palace when, to his astonishment, a guardsman asked him in perfect Portuguese: “Are you Dr Azevedo, the British consul in the Algarve?” It turned out that the British guardsman had mastered the Portuguese language while working at the Dona Filipa Hotel at Vale do Lobo.

His 'parishioners' were a diverse lot, of course. The first customer to come into the consulate in Portimão after it opened in 1965 was a Scot. When it came to signing a document confirming he was a British citizen, he refused to do so on the grounds that by declaring himself 'British', some might think of him as English rather than Scottish.

In his various roles, particularly his long involvement in the British-Portuguese Chamber of Commerce - a branch of which he helped establish in the Algarve - Joe was an honest broker in promoting business, along with such people as his friend of long-standing, chairman of the Chamber and founder of the venerable Penina Hotel near Portimão.

He is proud at being a vice-president of the Anglo-British Society in London, a long-time member of the Royal British Club in Lisbon, honorary president of the 41 Club in the Algarve, and the holder of card number four issued by the Association of Foreign Property Owners in Portugal. More than anyone, he has bridged the cultural gap between Portuguese and British people in the Algarve and further afield, mindful of his favourite motto, “may the hinges of friendship never rust”.

Joe has continuing respect for other retired consular colleagues such as Ron Underwood who still lives in Portimão, but the key figure throughout his long and distinguished career has undoubtedly been the person he calls his “Field Marshall.” The indomitable Zefita has been his devoted wife, wise councillor and steadfast partner through the “good days and the bad days” for the past 53 years.

Who knows, Zefita's memoirs may some day add a fascinating extra dimension to those of her truly remarkable husband.

Bailout requested - what now?

Bailouts are not the only thing the Portuguese and the Irish have in common. Both peoples can be darn stubborn. That is sometimes a beneficial trait, but it was somewhat embarrassing watching the former prime minister, José Sócrates, having to announce on television last night that Portugal needs a financial rescue package. He had spent months digging his heals in, saying such a measure was neither needed nor wanted. He was one of the very few people in economic circles who didn't think it inevitable.

What now? Details of the bailout have yet to be discussed. The request will be processed “in the swiftest possible manner, according to the rules applicable,” says the president of the European Commission, Manuel José Barroso. As a former Portuguese prime minister himself, Barroso said he had “confidence in Portugal's capacity to overcome its present difficulties.”

That is easy enough to say, of course. Now that the country's debt crisis has spiralled out of control, the Portuguese government will have to agree to tough austerity targets in return for a bailout. But who are the decision-makers going to be in the negotiating process? The country only has a caretaker government at present. The general election is still eight weeks away.

Greece needed 110 billion euros; Ireland needed 85 billion. Portugal may need a bit less, but it could be as much as 75 or 80 billion – not that a few billion here or there makes much difference to your average Portuguese man or woman who earns less than a thousand a month and can't possibly get their head around a million let alone a billion.

Even with a rescue package from the EU and the IMF on the way, the problem certainly doesn't end there. Portugal's economic, political and social problems are such that the country has a massive uphill struggle ahead.

And for the eurozone as a whole, things could get a whole lot worse. It remains to be seen if Portugal's bailout request satisfies the all-important bond markets. The fear is that the domino effect will now move to the very much bigger economy in neighbouring Spain.

Rising interest rates could have a devastating impact on Spain's trillion euro economy. The worry is that Spain, which, unlike Portugal, has suffered a huge decline in house prices and has unemployment running at far more than twice that of Portugal, may be too big to bailout.

This may be taking the doom and gloom scenario a bit too far. The Goldman Sachs Group are saying today that Portugal is likely to be the last euro country to seek an international bailout.

C.A.R. Hills - a writer troubled by love

I arranged to meet the acclaimed writer C.A.R. Hills in a beachside village in the eastern Algarve last weekend to learn more about why he had tried to hire contract killers to murder his mother's lover. I was also interested in why he had attempted to strangle a care worker. I knew he had served time for these crimes, but I was surprised to discover that he is now facing a recall to prison for breaching the terms of his parole licence by absconding to Portugal.

The one thing you can't fault Hills on is his openness and honesty. “In theory, I should feel remorseful about what I have done, but I don't,” he told me.

Charles Hills, as he is known outside the literary world, doesn't come across as a would-be murderer. Aged 55, physically he is short, overweight, unfit. Mentally he is the opposite: extremely alert, well-read and articulate. He smiles a lot, enjoys company and welcomes a bit of banter. Behind this façade, however, lies a lonely man who has always lived on his own and who suffers bouts of depression.

So how did he fall foul of the law? His story is one of surprising irrationality and ineptitude. Bizarrely, it is also a story of love. It is rooted in his love for his mother - an excessive, obsessive adoration that went far beyond the norm.

Maria José dos Reis was born into a peasant community near Mafra in 1923. After World War II she went to London and worked as a maid. She married an Englishman but it was an unhappy union. Charles was their only son. His father left his mother for another woman.

A bookworm throughout his childhood in Crawley, Sussex, Charles graduated from Oxford University and became a well-known figure in London literary circles. Under the name C.A.R. Hills he has written books, edited the journal PEN News and contributed to such publications as the Guardian, the New Statesman, and especially Prospect magazine.

According to Charles, his mother was “very independent, hard-headed, dynamic, lively and lovely.” Always smartly dressed, she ruled the Hills' household during the marriage. Having become a silver-service waitress, she stopped working in 1983 at the age of 60 and decided to return to Portugal.

Charles was 27 then. “I broke down and cried when I said goodbye to her at Crawley Station. I knew it was the beginning of a parting that would be for ever.”

Maria eventually bought a three-bedroomed house in Altura near the Algarve-Spanish border. On settling back in this country she could be rather snobby towards the Portuguese in an English sort of way, Charles said. Nonetheless, when she was well into her seventies she fell for the charms of a local gardener and handyman called Flávio Rosa. He was 30 years her junior, only two years older than Charles.

Although married with four children, Flávio moved in with Maria. Charles first learned they were having sex when his mother admitted it during a visit to London in 2000. It wasn't the sexual activity that bothered him. He became angry when his mother told him she had altered her will to give Flávio the right to permanently occupy the Altura house for the rest of his life. By that time Maria was suffering from Alzheimer's. Charles was convinced Flávio had exploited her confused vulnerability.

According to Portuguese law, as the owner's son, Charles would inherit his mother's house after her death. But he did not like the idea of sharing it with Flávio. Maria told Charles she had given Flávio the right to live in an upstairs flat. Later, on being allowed to read the will, Charles discovered that it was the whole house to which Flávio had living rights.

“The issue as I saw it was that my mother had tied me up in knots from which I could never escape. I wanted my freedom, and to be a whole person.”

For many years Charles lived alone in Clapham, London. It wa there that he went off the rails. The deaths of his mother in 2002 and father in 2004 worsened his delusional mental condition.

“The process of my gradual disintegration took about four years, during which I moved between England and Portugal and in many ways continued to live a normal life. Some people did not notice anything was wrong. Life in cities like London and Lisbon is an isolating process.”

There were, however, some very conspicuous and serious incidents. At times he raged. He tried to strangle the director of a social club for people recovering from mental illness. He admits he would have killed her had he been able to get both hands around her neck. He also tried to kill himself with an overdose. “As my mental health declined, I started fantasising that I was related to Goebbels. Soon it all became too much and I swallowed 100 pills,” he wrote while in Belmarsh prison.

He had already undergone psychiatric treatment by the time he decided to have Flávio killed. “I realised I couldn't do it myself. I became obsessed with finding a hitman.”

The first person he approached was a down-and-out drifter who disappeared with an up-front cash payment of £2,500. In 2006, indiscreet inquiries led to a series of meetings in London pubs with seeming 'professionals' and a £15,000 agreement: Flavio's death would look like and accident and his body would be dumped over the border in Spain.

Charles, who had always been broke and in debt, planned to fund the murder operation with a bank loan, dole money and help from the Royal Literary Fund. In the end no money was needed. He had been negotiating with undercover police officers.

In the Old Bailey in 2007, entirely in line with his open and honest character, Charles admitted his guilt to charges of soliciting to murder and grievous bodily harm. His seven-year sentence was reduced to five years upon appeal. With good behaviour he was paroled after serving two and a half. One of those years was so “unpleasant” he won't discuss it.

As if to emphasise just how absurd his criminal delusions had been, a Portuguese court overturned the will on the grounds that it had been made while Maria was suffering from dementia. In November 2009, Flávio was evicted.

After all he has been through, Charles doesn't like the house he has inherited and would like to sell it, but can't, not yet anyway. Apart from the state of the property market, the house is still in legal limbo. He is living off the proceeds of the flat he owned in Clapham and another near Lisbon.

Charles recently met his mother's lover again in Altura. The meeting was amicable, considering what had gone on before.

“I don't think I ever really hated Flávio,” he said. “It was just that he stood in the way of my freedom. When I saw him recently, when he came to collect his things, I didn't dislike him at all, nor, I think, did he me. We really got on very well and I helped him and his friends carry things to the van.”

Perhaps this attitude can be explained at least in part because Charles became a “liberal” Christian while in prison. “I'm not dogmatic, but I hold to the basics of Christianity,” he said.

Looking back on his murderous intentions, he does not see himself as a worse sinner than anyone else. “In theory I should feel remorseful, but I don't.” He conceded that perhaps it would be different if he had actually strangled the social worker, or succeeded in having Flávio eliminated.

But his days of wrong-doing are not yet over. Charles is now a writer on the run. After four months of regularly reporting to the authorities, he decided he'd had enough. He broke the terms of his parole licence and left Britain illegally.

Does he think he will be re-arrested and returned to prison? He doesn't know and doesn't seem to care. “It's in the hands of Jesus,” he told me with a shrug.

It is ironic that Charles' problems have stemmed not from hatred, but from love – his mother's love for him and his love for her. “She was certainly the most important person in my life. I think she spoilt me for love. I have never succeeded in finding any other love in my adult life.”

What of the future? Nine years after her death, Charles has come to terms with his mother's passing. The focus of his life now is not on his mother, nor the consequences of his infamy as Charles Hills, but on his quest for higher recognition as the writer C.A.R. Hills.

“I would like to leave Portugal, which has unhappy memories for me. I might travel a bit, and then buy a small house or apartment in Italy. I would need to find someone who is interested in my story and willing to pay a bit over the odds for my Portuguese house so that I could leave. Italy has something in common with Portugal, but the atmosphere is different, I do not think that I would find sadness there. Perhaps there, in a small city I already know, I can grow old gracefully, finish writing the story of my life, and at last learn how to love.”