By Nick Squires in Lesotho

There's a car bumper sticker popular in Lesotho these days which reads The Big Turn On - Lesotho's White Gold Flows to South Africa. It refers to the successful inauguration of one of Africa's biggest and most ambitious engineering schemes - the Lesotho Highlands Development Project.

Work started over a decade ago and the idea is to build a complex series of tunnels and dams in Lesotho's sparse, rugged Maloti Mountains to provide water for export to drought-prone Johannesburg, hundreds of miles to the north.

But "the big turn on" has proved to be a bit of a turn off, both for Lesotho's international reputation and for the people affected by the building of the dam.

Bribes

A former head of the dam development authority has been found liable in a civil court for accepting around $2m in bribes from international construction companies. Those firms are now themselves in the dock.

Hundreds of people have been moved from their homes, in the bare uplands of central Lesotho, complaining vociferously to environmental groups and the media. And many Basotho say the agreement under which the scheme is being built is unfair, having been negotiated back in the 80s by Lesotho's then military dictatorship and South Africa's apartheid regime.

Lesotho's relations with South Africa touch on almost every aspect of its affairs. It is, after all, one of only a handful of countries entirely surrounded by another state.

Demonstrations

"Lesotho has no meaningful sovereignty to speak of," a political scientist at the tiny University of Lesotho told me. "South Africa," he said, "is basically in charge." Stark evidence of that came just over a year ago, when South African troops were sent into Lesotho.

There had been demonstrations in the streets of the capital, Maseru, following claims by opposition parties that the recent general election had been rigged.

The government feared a coup. Pretoria called it "an intervention" - many Basotho viewed it as a hostile invasion. Either way, it was a confused and messy affair. Fighting broke out between South African and Basotho troops, and many South African-owned businesses were burned to the ground.

Roof of Africa Rally

Things are now slowly getting back to normal. Last month, dozens of South African off-road driving enthusiasts descended on Lesotho for the annual Roof of Africa Rally, which last year had to be cancelled.

Huge crowds turned out to watch a procession of noisy, fume-belching jeeps, motorcycles and quadbikes hurtle around the potholed streets of downtown Maseru before heading up into the mountains.

The event was a welcome boost for Lesotho's economy - and for the numerous prostitutes who hang around the big glitzy hotels.

Local politics is also returning to normal. There's a healthy number of parties in Lesotho, and they spend much of their time squabbling with each other over - well, it's hard to say, really.

What exactly are the issues that divide Basotho politics? I asked one respected political pundit. "Nothing," he said. "Absolutely nothing. It's all personality driven".

Days of independence numbered

The private sector in Lesotho is still small, he told me, with few opportunities. Anyone who wants to get on has to set his or her sights on public office. Hence the bitter infighting, and persistent allegations of corruption and nepotism.

Sitting above all this is the 30-something bachelor King of Lesotho, the British public school-educated Letsie III. The king is hamstrung by the constitution and rarely talks to the press, but his brother, Prince Seiso Bereng Seiso, is much more outspoken.

A dapper 34-year-old, with a penchant for designer sunglasses and cowboy hats, he has a reputation as a bit of a playboy. The constitution, he says, makes a mockery of his brother's position, and should be overhauled. The king should have the power to be able to intervene in politics in times of crisis, unlike last year when he had to remain silent behind the palace gates.

But the days of the monarchy, or at least of an independent Lesotho, could be numbered. Most of the country's future elite - the undergraduates at the university - believe that Lesotho cannot continue to survive alone and will, eventually, have to merge with big brother South Africa. Regrettable, they say - but inevitable.

Lesotho's "white gold" - those millions of gallons of cool water being pumped daily to the thirsty cities of South Africa - may not, after all, be enough to keep this small, proud country afloat.