The ruling ANC is facing its direst internal crisis yet as Deputy President Jacob Zuma fights for his political life in the face of mounting allegations that he is deeply involved in corruption.

The situation could not be more serious.

Since Sunday, when President Thabo Mbeki left for the Southern African Development Community (SADC) conference in Tanzania, Zuma, who commands widespread support and loyalty in the ruling party, has been the Acting President of South Africa.

He is also leader of government business in parliament and heads the government's moral regeneration campaign. As deputy president of the ANC he is also a major contender to take over as president when Mbeki steps down at the end of his second term in 2009.

Last week he chaired the fortnightly cabinet meeting while Mbeki was taking his annual leave and reportedly clashed with Justice Minister Penuell Maduna when he cited the president's authority in arguing for a moratorium on further official comment in the investigation into Zuma's affairs.

Zuma reportedly held sway in the cabinet and Maduna offered his resignation. In terms of ANC practice, what was even worse than the cabinet clash was that one of its members leaked the rare showdown to the Sunday Times.

It was after this event in cabinet that National Director of Public Prosecutions Bulelani Ngcuka, flanked by Maduna, who has line responsibility for the Scorpions - who were appointed by the president - made the extraordinary announcement that although there was at first sight evidence of corruption against Zuma, there was not sufficient evidence to ensure prosecution in a court of law and therefore the deputy president would not be charged at this stage.

Ngcuka's intervention raises a series of questions: why, after nearly two years of investigation by the Scorpions, did he suddenly decide there was not a strong enough case to prosecute Zuma?

If there had been such a strong case against Zuma - and the charge sheet against Schabir Shaik would suggest that there is such a case - why did Mbeki not call in his deputy and suggest that, to protect the office of deputy president, he stand down until the investigation had been completed?

There can be no doubt that the cloud hanging over Zuma, who frequently acts as president when Mbeki is abroad, has cast a shadow not only on the office of deputy president but also on the presidency itself.

Given the disclosures in court papers about an alleged attempt to arrange payment from a French arms company in return for "protection", Zuma's allegedly "corrupt relationship" with Shaik, the suspected turmoil of his financial affairs and his vulnerability flowing from this, it is not surprising that calls for his resignation are mounting by the day.

But Zuma, who has repeatedly invited the Scorpions to question and charge him, also has a case when he argues that he has been painted into a corner.

The only way he could attempt to clear his name would be to respond to charges in a court of law.

But Ngcuka said it had been decided not to charge him. That leaves Zuma - and by implication the ANC - between a rock and a hard place.

The cloud hanging over Zuma is likely to get larger and darker by the day and the damage to the public offices that he holds in the ruling party and the government will pay the price.

Parliament's ethics committee has yet to establish whether he has declared all gifts and payments received.

Mbeki, who once had the option to call Zuma in and persuade him to step down, will now find it far more difficult to justify such a move as Zuma has, temporarily at least, been let off the hook by the national prosecuting authority.

So why doesn't Zuma do the honourable thing and resign? Because politics often defies neat judicial and logical processes. Zuma is a larger-than-life figure in the ANC.

As former head of ANC intelligence, he commands significant power through his knowledge of informers for the apartheid regime who serve in the party and the government.

Through his skilful interventions with Mangosuthu Buthelezi in KwaZulu-Natal he has made a major contribution towards keeping the peace with the Inkatha Freedom Party, first under former president Nelson Mandela and subsequently under Mbeki.

Zuma, who has long been a confidant of Mandela, is also closely bonded with the group of influential ANC heavyweights who took part in Operation Vula, the underground campaign to rekindle grass-roots resistance if the ruling National Party reneged on any of its negotiating promises.

The Vula group, who included such ANC stalwarts as Mac Maharaj and the Shaik brothers, formed lasting bonds in the underground that appear to have provided the framework for some to extend the relationships into financial and political lives.

Schabir Shaik uses similar arguments to those Allan Boesak put forward to justify struggle accounting by the internal movements during the height of anti-apartheid resistance.

Shaik seeks to occupy the moral high ground through the elevation of loyalty to the struggle as an end in itself.

What has become clear from the Scorpions' charge sheet against him is that the cases of Shaik and Zuma are so intertwined that one cannot charged without the other also being charged.

The Scorpions under Ngcuka have gone a long way in establishing themselves as a credible, effective and independent law enforcement agency.

But the inclusion, in the charge sheet, of the statement that the ruling party, through Shaik as cedent, has a share in Nkobi Holdings – which has a share in African Defence Systems (ADS), member of the consortium that won part of the corvettes contract – might have crossed the receding line of party loyalty, even for those leading the independent institutions of democracy.

Zuma's response so far has been to deny outright his involvement in wrongdoing and he has often been aggressive in doing so – particularly where he has responded to Ngcuka. He has threatened to go to court to clear his name. But long court cases are unlikely to achieve the desired political effect.

Zuma may be hard-pressed to deny outright the detailed look at his financial affairs in Shaik's charge sheet.

As the Acting President weighs up his options he must be considering an approach to his president, who is due back this afternoon.

There would appear to be only one honourable course for Zuma to follow in the interests of the country and the ANC.

Failure to do so is likely to damage party and country at a crucial stage in nation-building.

With acknowledgements to John Battersby and the Cape Times.