Prince Rainier with hi beloved car

Even the skies over the tiny principality are grey and leaden, as people pray for the health of Prince Rainier, who has ruled here since 1949.

The latest bulletin from the palace described his condition as "worrying," more than two weeks after he was first admitted to hospital suffering from a chest infection.

The 81-year-old prince is immensely popular with his people.

His fairytale wedding to Hollywood star Grace Kelly gave this small tax haven for the Riviera's ultra-rich an added touch of fairytale glamour — putting it firmly on the international map.

His fortitude when Princess Grace was killed in a car accident in 1982 only won him more respect in Monaco.

He was also admired for his dignity when his two sometimes wayward daughters became the focus of worldwide tabloid attention.

The young Princess Caroline married her first husband, an older Parisian man with a reputation as a playboy, and his younger daughter Stephanie formed relationships with her bodyguards, later marrying a trapeze artist, and bearing three children out of wedlock.

"It feels as though a part of my own family is dying," says Mireille, who runs a bookshop near the harbour. Rows of yachts jostle for space, dominated by one as large as a floating hotel — complete with its own helicopter and landing pad.

"Prince Rainier is such a good man, and while we like his son Albert, we love him."

'Naughty prince'

Prince Rainier III

Mireille says she and many others among the principality's 32,000 residents are already preparing for the worst after palace spokesman Armand Deus issued a statement.

It said the condition of Prince Rainier's heart, lungs and kidneys left little grounds for optimism about the state of his health.

"He's a very naughty prince," one British long-term resident of Monaco told me, as she walked her dog near the palace gates.

"He simply wouldn't stop smoking, even though the doctors told him it was bad for his heart."

She agrees that the prince would be sorely missed, but says that few here hold out much hope that he can recover from his current illness.

Many are praying for him and lighting candles at the churches dotted across the principality.

Defending the realm

Monaco has changed much under the reign of the world's second-longest serving monarch (only the Thai king has been on the throne for longer).

Prince Rainier defended it — at times vigorously, but always with consummate diplomacy — from French attempts to re-assert its claim to this rocky strip of land on the Riviera.

He also did much to try to rid it of its reputation as a "sunny place for shady people," though many residents admit to being attracted by the lack of income tax.

Easter weekend is always a big money-spinner as gamblers and holiday-makers come to enjoy the restaurants, spas and the casino.

But there is little sense of celebration this Easter for the Monegasques, as Monaco's people are known.

Even as they walk past the harbour, many raise their eyes to the sandstone palace on the hill above to check if the red and white flag is still flying — to make sure that their prince is still with them.

Country profile: Monaco

A scenic beauty of Monaco

Monaco is the second-smallest independent state in the world. It is a playground for tourists and a haven for the wealthy, the former drawn by its climate and the beauty of its setting and the latter by its advantageous tax regime.

The country — a constitutional monarchy — is surrounded on three sides by France and occupies just under two square kilometres (0.75 sq mile) of the Cote d'Azur, where the Alpes Maritimes meet the Mediterranean. Tourism drives the economy; gamblers flock to the Place du Casino in Monte-Carlo and every May the principality hosts the Monaco Grand Prix.

OVERVIEW

Monaco is a major banking centre and closely guards the privacy of its clients. But it is also the focus of French concerns about its tax policy and has been accused of tolerating money-laundering - claims it strongly denies. Monaco does not levy income tax on its residents.

The royal dynasty, the Grimaldi family, is inseparable from Monaco's existence. The royals made world headlines in 1956 when Prince Rainier III married the American film star Grace Kelly. But the personal lives of the couple's daughters have had a less welcome press.

Prince Rainier, Grace Kelly in 1956

The prince and a Council of Government under his authority govern Monaco. An elected 18-member National Council exercises legislative power.

France maintains influence over the state; Monaco's minister of state, who must be a French citizen, is selected by the prince from a list of candidates drawn up by France.

FACTS

Population: 32,000
Capital: Monaco-Ville
Area: 1.95 sq km (0.75 sq mile)
Major language: French
Major religion: Christianity
Life expectancy: 75 years (men), 83 years (women)
Monetary unit: euro
Main exports: Pharmaceuticals, perfumes, clothing
GNI per capita: n/a
Internet domain: .mc
International dialling code: +377

LEADERS

Monarch: Prince Rainier III
Prince Rainier III
Prince Rainier III - or Rainer Louis Henri Maxence Bertrand de Grimaldi - succeeded his grandfather Louis II in 1949 to become Monaco's 31st ruler.

The prince has attempted to reduce Monaco's economic reliance on tourism and gambling by attracting business to the country. He has staunchly defended Monaco's banking and taxation systems in the face of criticism from France.

The public and private lives of the prince and his family have been well-documented. The media portrayed the prince's courtship with American actress Grace Kelly in 1956 as a fairytale romance.

The couple married in 1956 and had three children; Princess Caroline, the heir to the throne Prince Albert, and Princess Stephanie. Princess Grace died following a car accident near Monte-Carlo in 1982.

Prince Rainier was born in 1923 and was educated in Britain, Switzerland and France.

Minister of state: Patrick Leclerq

MEDIA

The influence of Monaco's broadcast media extends far beyond the borders of the tiny state. From the 1960s Radio Monte-Carlo used powerful transmitters to reach listeners across much of France, and in the 1970s broadcasts to Italy began. Radio Monte-Carlo now has extensive FM networks in both countries.

Radio Monte-Carlo Moyen Orient - a service for the Arab world set up in 1972 - is now operated by Radio France Internationale.

Television's great and good gather in Monaco every year for the Monte Carlo Television Festival, set up in 1961 by Prince Rainier.

No daily newspapers are published in Monaco, but French papers cover news from the principality.

The Press

Journal de Monaco - government weekly
Monaco Hebdo - weekly
Television

TV Monte-Carlo (TMC)
Radio

Radio Monte-Carlo (RMC) Info - French-language news and talk network
Radio Monte-Carlo (RMC) - Italian-language network
Radio Monte-Carlo Moyen Orient - pan-Arab station, now based in Paris and operated by Radio France Internationale