Twenty of Europe’s most powerful men and women had good reason this week to wish they had never heard of the Leonardo da Vinci programme - an idealistic vocational education scheme.

On Tuesday, the European Union woke up to the news that its entire ruling commission had been forced to resign.

Independent auditors had uncovered widespread mismanagement, fraud and cronyism at the heart of the union. Education Commissioner Edith Cresson and the once obscure Leonardo project were at the centre of the web.

In quieter times, Leonardo, set up in 1995 to promote vocational training links across member states, seemed like just another of those strangely-named but well-funded schemes in which the commission’s education department appeared to specialise.

In Britain, student mechanics from Birmingham were among the beneficiaries of Leonardo’s pound;435 million budget, getting the chance to work in Swedish and Dutch garages as part of their studies at Handsworth College. They found cleaner, better-equipped workshops which, they said, had opened their eyes to new ways of running their industry.

Back in Brussels, however, Leonardo had another aspect: the archetypal “gravy train”. In February, an investigation by the commission’s anti-corruption unit reported fraudulent expenses claims, inflated fees, unauthorised pay rises, payments to non-existent trainers and nepotism.

One senior manager is alleged to have written herself fraudulent cheques totalling more than pound;25,000. Other administrators seem to have been awarding each other loans totalling pound;175,000.

After the anti-corruption unit’s findings hit the newspapers in February, the European Commission cancelled its multi-million pound contract with Agenor, the private company running Leonardo. Jacques Barry, the chairman of company’s board, and Richard Walther, the project’s director, resigned.

But, despite the refusal of Edith Cresson, Europe’s controversial commissioner for education and research, to take responsibility for the “irregularities”, the buck did not stop there. The Leonardo scandal was made public as concern mounted about corruption across the commission, and it seems to have spurred on Monday’s dramatic resignations.

Mme Cresson - a former French prime minister known as “Edith-la-Flamboyante” - was already facing criticism about her decision to appoint a septuagenarian dentist from her home town to head an EU Aids research project.

Reports of fraud in the commission’s security office, “irregular expenditure” in its humanitarian aid programme and “inappropriate” appointments were also circulating.

This week’s auditor’s investigation confirmed many of the allegations and, while making clear that there was no evidence of any commissioner being directly involved in fraud, concluded that they shared joint responsibility for failing to act against it.

The auditors criticised the “unacceptably high” daily consultancy fee of pound;1,900 charged by Sir Geoffrey Holland, vice-chancellor of Exeter University, for his advice on Leonardo. The university this week said the fees were its standard charge and had been agreed.

With the European Parliament still seething over Mme Cresson’s failure to take responsibility for the Leonardo scandal, MEPs were in no mood to overlook the auditor’s findings.

Early next morning, the commissioners decided to go quietly.

UNDER SOCRATES’ UNBRELLA

MOST European education cash has been channelled through Socrates with a five-year budget for 1995-1999 set at 850 million euros (pound;586m). The next round, covering 2000-2007, is likely to see reforms. Socrates includes:

Comenius - funds three-year projects involving three or more schools from different EU countries. Co-ordinating school gets 3,000 euros a year, partners get 2,000 euros each. Exchanges not usually involved. Also funds education support for travellers’ children, anti-racism projects, and training for teachers in developing a “European dimension” in their teaching.

Erasmus - exchange and study programme for higher education students and staff. Grants of up to 2,500 euros support study or work abroad for three months to a year.

Lingua - supports one-year projects between two schools in different EU countries, underwriting 50-75 per cent of cost of pupil exchanges.

Also funds teacher exchanges and in-service language training for all teachers, including courses abroad to improve language skills.

Arion - funds study visits for education decision-makers.