President Hosni Mubarak, after a year of wavering over how to deal with the issue of widespread corruption in Egypt, has decided to try the brother of slain president Anwar Sadat on charges of fraud, black-market dealings and a wide variety of other offenses.

The case of Esmat Sadat, 57, a former bus driver who became a millionaire during the presidency of his brother, has quickly become a cause celebre that is expected to have far-reaching repercussions on the Egyptian political system.

It could lead to a clear break between Mubarak and the circle of Sadat's old proteges and associates who were the prime beneficiaries of the late president's "open door," or free enterprise, policy initiated in 1974.

This is because Esmat Sadat is expected to implicate a number of ministers and other high-ranking officials, past and present, in his wide-ranging wheelings and dealings. Justice Ministry officials said this week that his trial is expected to begin by early January.

The trial could turn into an indictment of the "open door" policy and even Sadat government itself, at least in the eyes of the Egyptian public. One of the key questions likely to be raised will be why the former Egyptian leader did not take stronger measures to curb the excesses of which he reportedly was aware.

The corruption trial also could help establish Mubarak as his own man and to boost his fading popularity among Egyptians outraged over the wealth amassed by a few during the Sadat years and disappointed with the lack of substantive changes since Mubarak took office last October.

Mubarak has shifted back and forth in his statements about the need to clean up the corruption that has grown since the "open door" policy began. When he came to power, he pledged he would not be lenient on those found guilty. But later he downplayed the issue, arguing it was no worse here than in other Arab countries. He also let it be known he did not want to put the Sadat rule on trial.

Only one relatively important case has come to trial previously, that of a deputy in parliament, Rachad Osman, who was sentenced to one year in prison last January for obtaining imported goods duty free illegally.

Then, on Oct. 3, Mubarak indicated he had not forgotten his election pledge and was about to take action. "Law rules over everything and rises above people whoever they may be," he said in a speech to parliament. On Oct. 6, Mubarak is said to have warned Esmat Sadat personally during services marking the first anniversary of the late president's assassination that he would be prosecuted.

Anwar Sadat reportedly knew Esmat, who is his half-brother, was abusing his name and kinship to promote his dealings.

President Sadat even ordered him banned from all duty-free zones in the country as well as the port of Alexandria where he was obtaining the imported goods he allegedly later sold at high profits on the black market.

Ibrahim Saada, editor of the daily Akhabar el Yom who has been a leading crusader against corruption, said the late president once remarked to him in despair, "What can I do with this brother of mine?"

In an interview, Saada said he had briefed president Sadat on his investigations into the financial misdeeds of his brother in association with Rachad Osman.

Despite this and other evidence Sadat knew what Esmat was up to, the late president never had his brother brought to trial. He did, however, stop another half brother, Talaat Sadat, from obtaining choice land belonging to the Religious Affairs Ministry near Qubbah Palace in Cairo, according to Saada.

Saada wrote in a recent column that Mubarak was instrumental in blocking an attempt by Esmat Sadat and an unnamed American partner from obtaining the contract for the shipping of U.S. arms to Egypt by trying to capitalize on his name to get it and without submitting a bid in competition with other companies.

The contract was subsequently won by Hussein Salem, a former Egyptian intelligence official, and Thomas S. Clines, a former CIA agent. The Justice Department is investigating the bills presented by their Egyptian-American Transport and Service Company -- $51 million -- for the transportation of $300 million worth of arms.

During the last years before president Sadat's assassination, the relationship between him and Esmat and Talaat was apparently extremely strained.

According to testimony given by Esmat Sadat to the Socialist prosecutor general and published this week in the local press, he and the late president were not on speaking terms during the three years prior to the assassination and had to deal with each other through intermediaries.

Sadat even ordered his wayward brother arrested at one point in 1978 for drug smuggling but relented after six weeks "under family pressure," according to the published testimony. Esmat and Talaat Sadat were born of the same Egyptian mother. The late president shared the same father but his mother was Sudanese.

In his autobiography, "In Search of Identity," the late Egyptian leader wrote about his strong attachment to Egyptian family values and thus his distress at having to issue a detention order against Talaat because he had "behaved arrogantly toward his neighbors." He did not elaborate.

Esmat Sadat was sentenced to three years in prison for embezzling funds from a bus company in 1968. He restarted his career as a bus driver in a public transportation company and was reportedly earning $80 a month as late as 1973.

Thereafter, according to charges against him, he quickly became involved in various dealings ranging from drug smuggling to a fraudulent cooperative housing scheme.

His fortune is estimated in the local press anywhere from $40 million to $180 million. He is reported to have established at least five import-export companies, amassed property in seven provinces, including six houses and dozens of apartments, and to have had his own fleet of trucks.

Allegations against him also include the importation of wood, iron and steel duty free and their sale on the black market, bringing into the country 2,500 tons of meat not slaughtered in the Islamic tradition, illegal land and property dealings and the collection of half a million dollars for a housing scheme that never saw the light of day.

The prosecutor general has already impounded all his property and that of his present two wives, two other former ones and 15 children.