THERE is a long history of welfare fraud in the Republic. Everybody knows some one who is operating, or who has encouraged or assisted others to operate, in the black economy. It has become part of what we are.

And, in an apparent celebration of this state of affairs, successive governments arranged tax amnesties to facilitate large scale fraudsters. On the last occasion it may have been he Labour Party's influence on Fianna Fail in government social welfare recipients were also included in the general amnesty.

The generosity of that government was also reflected in Michael Woods's decision to relax the "dole" regulations. Operating on a "presumption of honesty" basis, the Minister for Social Welfare no longer required a person to "sign on" once a week. It could be done a month. And the payment of= claims was transferred from employment exchanges and Garda stations to post offices. The "reforms" were completed by early 1994.

It took a little time for the penny to drop with the unemployed underclass. But the result was as spectacular as throwing petrol on a smouldering fire. The Live Register figures, which had fallen from 295,000 in 1993 to 283,000 in 1994, "began to grow rapidly, even though the economy was powering ahead.

Politicians and political parties went with the flow. Rather than risk unpopularity with the 2850001 people now on the Live Register, politicians ducked and weaved, asked the occasional hard Dail question and kept the lid on a simmering pot of social unrest. Far from cracking down on abuses within the social welfare system, politicians and civil servants turned a blind eye. Even the language used was instructive. Social Welfare officials talked about "irregularities", rather than "fraud", as Department, of Agriculture employees had done in pre Beef Tribunal days.

Since the mid-1980s an unexplained gap has existed between figures compiled through the Labour Force Survey and those gathered through the Live Register. But this had grown to 86,000 by last year and, when the opposition parties got stuck in, it could no longer be ignored by the Government. Reassurances by civil servants that fraud amounted to less than 5 per cent just did not reflect what politicians knew from personal experience.

By last week, the political tone had changed, modified out of all recognition by CSO findings which led Proinsias De Rossa to the conclusion that "fraud on unemployment figures is running at 20-25 per cent of the total live register".

IT is the hottest of hot political issues. And Fine Gael and Labour Party Ministers are, in the word of one insider, "thanking Jesus that it isn't their poisoned chalice".

For the leader of Democratic Left it could be a vote losing exercise. In order to get at the "fraudsters", his officials will have to inconvenience an awful lot of people who are legitimately claiming benefits. And people resent such inquiries.

During July, when the Department of Social Welfare targeted Donegal for a special investigation into fraud, local politicians complained bitterly that a "reign of terror" had been instituted. It has ever been thus in rural constituencies, where politicians from Fianna Fail and Fine Gael have shouted loudest about over diligent officials. And the same song has been sung in urban areas by the Labour Party and Democratic Left.

Unemployment has become such a key election issue that rising figures are more useful to opposition parties than the whiff of fraud. Only a week ago, the deputy leader of Fianna Fail, Ms Mary O'Rourke declared "Minister De Rossa alleged this morning that the reason the Live Register is 7,000 higher now than it was a year ago is because of fraud. This is a nonsense and is being used as a smokescreen to hide the fact that the Government's employment policies are not working." A Fianna Fail front bench meeting in Westport yesterday delivered a strangely muted response to the fraud figures. A spokesman confined himself to wondering whether control procedures within the Department had been relaxed by Mr De Rossa.

Dole fraud is just one support in the black economy, but once you begin to hack it out, there is no knowing what parts of the house will fall. The pervasive nature of it has also caused some politicians to hesitate.

There was no such hesitancy within the Progressive Democrats. The fact that attacking social welfare fraud had suddenly become "politically correct" meant, one observer said, that Michael McDowell's birthdays had all come together.

The Government had a duty to the hard pressed taxpayers of the country, Mr McDowell thundered, to sort these fraudsters out. And he identified "pensioners, carers and others who struggled daily to make ends meet" as the biggest casualties of fraud.

AS for the Government's new measures to combat dole fraud, they were "totally unsatisfactory". He demanded instead the introduction of a national system of identity cards, the amalgamation of FAS and the Department of Social Welfare and the reduction of welfare payments for people who declined job offers.

The two largest Government parties were playing it cool. Proinsias had the ball and neither Fine Gaelinor the Labour Party was going to impede him. Mr De Rossa pointedly welcomed Government support for his efforts to deal with this new situation. And he drew attention to the £200 million he had already saved the taxpayer in fraudulent claims.

Home visits and spot checks would be stepped up twice yearly interviews would review people's dole eligibility and FAS, Social Welfare and Enterprise and Employment would co-operate more closely. But he was strangely coy about the introduction of new social welfare cards with photographs. A Government statement said Mr De Rossa was "developing proposals" in that area.

Just how quickly those controversial "proposals" are developed may depend on the pressure that is exerted by Fine Gael and Labour Ministers. Mr De Rossa has been requested to report to Cabinet on a monthly basis on the implementation of his anti fraud measures.