But EU judges in Luxembourg said Ms Cresson can keep her full €42,300 a year pension arguing the verbal rebuke is punishment enough: "The finding of breach constitutes, of itself, an appropriate penalty."

"This sounds good. This is what we expected," a contact in the now 72-year old Frenchwoman's legal team told EUobserver.

The European Commission, which brought the case against Ms Cresson in 2004 under huge public pressure, said the judgment closes the affair and that it has cleaned up its internal audit system in the meantime.

Some MEPs found the ruling in bad taste however. "This decision sends out the wrong signal. It says the European Union tolerates people who abuse their position and defraud European taxpayers," British tory Richard Ashworth stated.

His remark echoes the opinion of the EU court's own legal expert Leendert Adrie Geelhoed in February, who recommended Ms Cresson should lose half her pension rights.

"The personal qualities of the commissioners, their perceived independence, impartiality and integrity, reflect directly on the confidence the general public has in the [European] Community institutions," the lawyer had said.

The European Court of Justice is the EU's highest court with no right of appeal.

The dentist

The court's final judgment hinged on Ms Cresson's decision to appoint her friend and dentist Rene Berthelot as a scientific advisor to her education cabinet team.

The appointment was made on her "express request" the court said, despite commission administrators telling her that Mr Berthelot - at 66 - was too old for the job.

He earned €150,000 over two and half years, producing only a worthless 24-page report on HIV. Mr Berthelot died in 2000.

The court found Ms Cresson innocent of wrong doing in hiring a second personal friend, lawyer Timm Riedinger, to also work for the cabinet team.

The scapegoat

Her defence was based on technicalities regarding the court's jurisdiction. She also argued she was being made a media scapegoat for the fraud-related fall in 1999 of the Jacques Santer commission.

Most of the senior officials involved in the 1999 Santer scandal and the later 2003 Eurostat corruption affair are still either working for the commission or drawing their pensions.

Ms Cresson is still active in politics, attending this week a rally in Paris in support of Iranian dissidents.

As French prime minister in 1990 and 1991, the well-heeled Parisian socialist had the lowest approval rating in recent history with 18 percent.