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In May, 1944, a Polish Jew named Georges Lipietz was denounced by neighbours in the southern French town of Pau, where he had sought refuge from the Holocaust. He was arrested by the Gestapo, bundled onto a French cattle car and taken first by train and then by public bus to a French transit camp outside Paris.

When the camp was liberated three months later, Mr. Lipietz walked free. But in the years before he died in 2003, he often spoke about those who were not so lucky, the tens of thousands of Jews who were also rounded up and packed into squalid trains owned and run by the state railway, the SNCF, then shipped like so much unwanted cargo to death camps.

"My father never stopped being bitter," said his son, Alain Lipietz, a deputy in the European Parliament. "He would say that the SNCF, in its technocratic zeal, tried to do a better job of deporting the Jews than even the Nazis."

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A French court, in a landmark case, has now come to much the same conclusion. But its decision has stirred up even more anger, pitting memory against memory in France and raising hard questions about the limits of collective guilt.

In response to a suit by the Lipietz family, an administrative tribunal in Toulouse said the French state and the SNCF were liable for damages because of their negligence in participating in the deportation of Jews during the Second World War.

It also ruled that the railway, contrary to its own narrative of its wartime history, acted on its own initiative, and not under German orders, when it stuffed Jews into cattle cars in "abominable" conditions and then billed the Vichy government for third-class tickets for its captive passengers.

"The SNCF," the tribunal said, "never even tried to stop the transports, preoccupied as it was with making sure it was paid by the French state."

Many Holocaust survivors in France and elsewhere welcomed the ruling as the first time a French court condemned a contemporary French government institution for its role in rounding up Jews and sending them to their destruction in death camps.

The decision has heartened French Holocaust survivors, including several now living in Canada, who have filed a class-action suit in a U.S. district court in New York charging the French government and the SNCF with complicity in crimes against humanity.

Some say the French court did not go far enough.

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"Sure the SNCF had to obey the orders of the Nazis, but they did more," said Jean-Jacques Fraenkel, a French-born Canadian who witnessed his parents dragged away by French police and shipped on French trains to die at Auschwitz.

"They never stopped a train even when they knew its itinerary and what was in the car," Mr. Fraenkel said. "Why did they do nothing?"

In France, the tribunal's decision also aroused a different category of resentment, not only because it tarnished the near mythic reputation of the SNCF as a bastion of resistance to the Germans. In the view of some French Jews, who fought for decades to bring Gestapo officers and French collaborators to trial, the two cases against the SNCF divert responsibility from those who actually organized and ordered the deportations.

"If the SNCF is guilty, then the guy who drove the bus is guilty, the guy who provided the gas is guilty, the person who typed the lists is guilty," said Arno Klarsfeld, a Paris attorney who defended the record of the railway. "The danger is that if everyone is guilty, then no one's guilty, from the top of the chain to the bottom."

Mr. Klarsfeld's involvement and high-profile statements on behalf of the SNCF have been one of the more painful aspects of the case for many survivors and their relatives. He is not any lawyer, but the son of France's most famous Nazi hunters.

His parents, Serge and Beate Klarsfeld, were the driving force in persuading France to reopen its wartime files in the late 1980s and bring Gestapo officers and high-ranking officials of the collaborationist French Vichy government to trial for crimes against humanity.

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Still, Arno Klarsfeld, named after his father's father, who died at Auschwitz, said his position was not inconsistent with his parents' mission. "You have to distinguish between persons that had responsibility and those whose positions were in a way automatic," he said.

For the Jewish survivors in the New York lawsuit, who hope to see the SNCF found guilty of crimes against humanity, such arguments acquit too many people who stood by when Jews and their families were prepared for slaughter.

"I don't understand Arno Klarsfeld at all," said Mr. Fraenkel, now retired and living in Victoria. "He has the right to say what he wants. But to take a position against the suffering of the Jews, including his own grandfather -- it's incomprehensible."

For decades after the war, the official view in France was that the Vichy collaborationist government was illegitimate and that subsequent French governments were not accountable for its crimes.

Then in 1995, President Jacques Chirac formally acknowledged that France shared in the responsibility for crimes against the Jews, saying "the criminal folly of the occupier was seconded by the French, by the French state."

The declaration set off a string of war-related commissions to look into claims of stolen artwork, to pay orphans of deportees, and to handle reparation claims by Jews whose property was confiscated by police and others.

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But the reparations commission did not cover claims for property taken on the SNCF trains or at the transit camps, according to Harriet Tamer, an attorney representing the Holocaust survivors in the New York lawsuit. The suit accuses the railroad, as well as other government agencies and workers, of systematically taking property, jewellery and money from Jews as they were placed on trains and dumped into holding camps before deportation.

According to Mr. Klarsfeld, there is no documentation for that claim, and the SNCF also denied that the railroad profited from the deportations beyond charging for the use of the trains.

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