THE Austrian government is facing collapse after revelations of startling police incompetence and a ministerial cover-up in the case of Natascha Kampusch, the girl who was kidnapped at the age of 10 and held in a cellar for eight years.

Kampusch is in line for millions of pounds in compensation after it was disclosed that she could have been released after a few weeks in captivity in 1998 if police had followed early leads. She did not escape until August 2006.

Shortly before a general election in October 2006, a police chief discovered that Kampusch’s abductor had been identified as a key suspect within weeks of her disappearance but nothing had been done. The interior minister at the time of the election appears to have suppressed the news and officials misled the press on her behalf.

The revelations have delivered a potentially fatal blow to the ruling coalition of the conservative People’s party and the Social Democrats. A parliamentary inquiry has been demanded that could lead to disciplinary charges against senior officials.

Alfred Gusenbauer, the chancellor, was compelled to demand compensation for Kampusch. He said: “This is a girl who’s been kept imprisoned for more than eight years. I think the least the state can do is make a reasonable gesture.”

Kampusch, who is 20 today, said she was enraged and horrified by the disclosures and that she had lost faith in the authorities. Their handling of the case bordered on “madness”, she said. Her lawyers have begun negotiations on a possible damages settlement.

Kampusch said: “It’s a matter of quite a few years out of my life – important years that I’ve lost.

“If one makes a mistake, one should try to fix it and learn from it. It’s not about money; it’s a matter of justice being done.” Kampusch was snatched from the street as she walked to school by Wolfgang Priklopil, a telephone engineer, who kept her in a dungeon at his house near Vienna. She escaped when he was distracted by a telephone call and she ran to a neighbour, who called the police. Priklopil committed suicide within hours by jumping in front of a train.

Herwig Haidinger, the former head of the Federal Criminal Police Office, then discovered that an officer had filed a reporta month after the girl vanished, saying that Priklopil’s white van, which was used in the abduction, matched one described by witnesses.

The officer reported: “The man is a loner who has extreme difficulties in communicating and sociability. He apparently lives in the house with his ageing mother and is said to have sexual urges towards children. He could also have weapons in his house.”

Two other officers questioned Priklopil about his van and ruled him out as a suspect, despite his failure to provide an alibi for the day of the kidnapping.

Haidinger claims he was ordered by officials of Liese Prokop, the interior minister, not to disclose his findings to avoida political scandal so close to the election.

At a press conference after Kampusch’s escape, senior officials told journalists in the minister’s presence that the officers had said Priklopil had an alibi. But the officers’ report read: “Priklopil stated that he was at home the whole day . . . he was alone and therefore has no alibi that could be confirmed.”

Haidinger has been told that his contract as police chief is not being renewed and the affair has prompted such hostility between the ruling parties that it could lead to early elections.

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