The blocks of council flats are drab but neat, with metal balconies painted in desperately bright colours. Between them are bumpy roads, patches of waste ground and a scattering of allotments.

Most of the allotments have not been touched since the summer. They contain a few half-frozen leeks and beetroots, a child's broken spade. One of the allotments, just off the Rue Lucien Hénin, stands out from the others. It has been dug and double-dug and dug again.

The "gardeners" were policemen. They came here with mechanical shovels. They were looking for the body of a child, aged five or six, whose first name may have been Zaya, who may have been of North African origin, who may have been Belgian.

According to two witnesses, she was sexually assaulted, tortured and then beaten to death two years ago in a fifth-floor flat in one of these council blocks in Outreau, a depressed industrial suburb of Boulogne-sur-Mer.

No child answering her description has been reported missing, either in Belgium or France. French investigators fear that she may have been "sold" by her family to a paedophile sex-ring, operating across the Franco-Belgian border, 40 miles north of here. Alternatively, she may never have existed. The searches in the allotments off the Rue Lucien Hénin have produced nothing. Searches of other houses, and other gardens, have proved equally fruitless.

And yet two witnesses, who barely know one another, have given virtually the same story from separate prison cells. The little girl was brought by a distinguished-looking Belgian in his 50s to the apartment of Thierry D, a brutal man in his 30s who collected human skulls and allegedly belonged to a large paedophile sex network.

Thierry D entered the network, it is alleged, by renting out his own children – boys aged from four to 12 – to local traders; to Dominic Weil, a Catholic priest who lived next door; to a court bailiff and his wife; and to a paedophile video-shop in the back streets of Ostend in Belgium.

Both of the witnesses – one of whom is Thierry D's 30-year-old wife, Myriam – said that the little girl spoke Flemish and looked as if she was of North African origin. Both said that she was sexually assaulted and tortured by the Belgian visitor. They said that Thierry D hit her to make her keep quiet. They said that he appeared to lose control and rapidly beat her to death. She was carried away in a blanket.

Thierry D has formally been accused of murder. (His full identity has been withheld to protect his children.) Police in Boulogne say that they are "50 per cent sure" that a murder took place. In other words, they are not sure whether it did. Could the witnesses be inventing "Zaya" to draw attention away from themselves?

The Outreau saga is horrific enough, even without the killing of an unknown and unclaimed little girl. Until the allegations about the death of Zaya, the events here went almost unnoticed in the French, national media. In the past few days, the search for the little girl's body has caused consternation in France and Belgium. In Belgium, it has revived memories of the case of Marc Dutroux, arrested in 1996 but not yet tried on charges of kidnapping, murdering and raping children.

In France, the Outreau case has launched an anguished national debate about an apparent surge in sexual crimes against children. There were 13,500 paedophile sexual crimes recorded in France in 1999 – making up more than half of all sexual offences for the first time.

On Thursday Lionel Jospin, the Prime Minister, introduced a twice-monthly meeting of ministers to discuss paedophile crimes and how to identify and combat them. The ministers decided to launch a public awareness, advertising campaign on television and in cinemas next week and to create a national, police register of paedophile offenders (something that already exists in Britain).

Several of the recent cases of sexual offences against children have been in depressed industrial towns in northern France, including an unconnected case of two brothers and their wives arrested in Outreau in November for assaults on their own and other children.

Local people have been infuriated by the fact that French national media reports have emphasised that Outreau is a town of high unemployment (more than 20 per cent), with people of "low IQ" and a high incidence of drunkenness, teenage pregnancies and wife-swapping parties.

"They have made us sound like Sodom and Gomorrah," said Evelyne, 45, who lives in an apartment block not far from the flat of Thierry and Myriam D. "This is not a wicked place. It is a quiet place, where people mind their own business. What happened, if it happened, was execrable but it is wrong to imply we are all like that."

Information leaked to the local press by the investigators suggests, none the less, that there was an organised market in child sex in Outreau over several years and that local people ignored – or failed to recognise – the warning signs. Seventeen adults have been arrested and 40 children have been placed in care.

The evidence, including detailed statements by children, suggests that Thierry and Myriam D, and other impoverished parents, sold their children's services to wealthier people, including the bailiff, a shopkeeper to whom they owed money and the 64-year-old priest. All are among those arrested. This allegedly developed into organised sex parties with children in a farm house near Ypres in Belgium. The sessions were filmed for sale as videos by a French man and his son, who owned a clandestine video business in Ostend.

Thierry D has denied that "Zaya" ever existed. The search for her body continues.