But when the neighbours include the head of government, a powerful newspaper boss and a TV celebrity with a taste for fast cars, the whiff of scandal is unmistakable.

The small, quiet town of Chipping Norton has shot to fame since it emerged that Prime Minister David Cameron and former News International CEO Rebekah Brooks frequently socialised in the area, along with other rich and well-connected friends.

The phone-hacking scandal that led Rupert Murdoch to close the News of the World, and that cost Brooks her job at the helm of Murdoch's British newspapers, has also exposed many secrets of a group of friends now known as the "Chipping Norton set".

Nestled amid rolling fields and woods in Oxfordshire, a two-hour drive northwest of London, Chipping Norton is a typical picturesque English country town, low stone houses ranged around a broad market square lined with estate agents, pubs and grocery stores.

Local shopkeepers, bemused by the acres of newsprint devoted to the set in recent months, are happy to gossip about recent celebrity sightings at the butcher's or florist's, but mostly treat the town's newfound fame as a joke.

"I have lots of celebrity customers but unfortunately they're all getting arrested at the moment. I lost two customers last week," chuckled an antiques dealer, who did not wish to give his name lest he should offend his prized clientele.

Brooks and her husband Charlie, a racehorse trainer, were arrested at dawn on March 13 at their sprawling country home and questioned by police on suspicion of covering up evidence of illegal practices at the News of the World.

It was the latest development in an unending saga that has raised questions about the close relationships between the press and the cream of British politics.

HORSEGATE

These were epitomised by the tale of Raisa, a retired police horse loaned to Rebekah Brooks and once ridden by Cameron, as he finally admitted on March 2 after days of evading the question.

Not only did this confirm that his friendship with the disgraced Brooks went well beyond a neighbourly acquaintance, but it also conjured up the damaging vision of a prime minister enjoying elite country pursuits alien to most voters.

"I don't think I will be getting back into the saddle anytime soon," Cameron told reporters, trying to laugh it off.

But the revelation, dubbed "horsegate" by gleeful media, was the last thing Cameron needed after years of playing down his privileged background, an electoral liability at a time when his government is slashing state spending to reduce the deficit.

The wealthy son of a stockbroker, Cameron was educated at Eton, the most exclusive private school in Britain. His stylish wife, Samantha, is the daughter of a baronet.

Cameron has worked hard since he became leader of the Conservative party in 2005 to rid it of its reputation as the party of the wealthy, the hunting and fishing set. Endless newspaper articles on the gilded lives of the Chipping Norton set are unlikely to help him.

Some observers of British politics say the so-called set is only the establishment doing what it has always done.

"It's not a conspiracy. But that horse symbolises something about our society. It shows that the British establishment is still there and still has a lot of influence," said Ivor Gaber, professor of political journalism at City University in London.

He pointed out that Cameron's Labour predecessors, Tony Blair and Gordon Brown, had been equally assiduous in cultivating friendships with members of Murdoch's close circle.

"Murdoch's genius was to spot a winner, back a winner and change sides at the right time. Naturally Rebekah Brooks, his protégée, learnt that lesson," he said.

Both Brown and Cameron, then prime minister and leader of the opposition respectively, attended the 2009 elegant lakeside wedding of Rebekah and Charlie Brooks near Chipping Norton.

CAMELOT

"It's a story of continuity rather than change. Rebekah Brooks has moved effortlessly from one Camelot to another," said Catherine Mayer, Europe editor of the magazine Time, evoking the glamour of John and Jacqueline Kennedy.

"People in the public eye become friends with each other precisely because they are in the public eye. David Cameron felt safe around the Brookses. Ironically, that would have been one of the attractions," she said.

The proximity of the Cameron and Brooks country homes is a coincidence. Cameron bought a home in the secluded hamlet of Dean because it is in his parliamentary constituency of Witney, while Charlie Brooks, who also went to Eton and was friends there with Cameron's older brother, has family ties in the area.

But the intimacy between them and other members of the Chipping Norton set has astonished many Britons.

Among the talking points is a photograph of Cameron in a t-shirt chatting with TV celebrity Jeremy Clarkson as Alex James, the bassist from the band Blur, smiles in the background. It was taken at a food and music festival hosted by James last September at his Cotswolds farm, just west of Oxfordshire.

Clarkson, presenter of the BBC's motoring programme Top Gear, has a luxurious home on the outskirts of Chipping Norton, where he is credited with introducing Charlie Brooks to Rebekah.

CHRISTMAS PARTY

The TV star known for his politically incorrect outbursts is an unlikely but central member of the set. Guests at his 50th birthday party reported that Cameron made a surprise video appearance disguised as The Stig, a famous Top Gear character.

Elisabeth Murdoch, daughter of Rupert, and her husband Matthew Freud, head of an influential public relations firm, are also members of the set even though Clarkson has joked that to residents of Chipping Norton, the Freuds' multi-million-pound home in Burford, a few miles away, "is basically France".

The British media have also endlessly retold the tale of a 2010 Christmas party hosted by the Brooks and attended by Clarkson, the Camerons and James Murdoch, son of Rupert and then chairman of News International.

At the time, it was controversial because the government was considering News Corp's bid to take over the broadcaster BSkyB. Since then, the bid has been dropped, a casualty of the phone-hacking scandal.

Evidence is mounting that many of Cameron's own Conservative allies are unimpressed by the antics of the Chipping Norton set.

"It's all about lifestyle and power. Politically it's completely vacuous. It doesn't do him much credit," said one Conservative member of parliament, who did not wish to be named for fear of damaging his career prospects.

Back in quiet Chipping Norton, these debates were like the distant rumble of thunder when the sky overhead is blue.

Sakine Khosravi, owner of a boutique selling handcrafted items from Iran, spoke in glowing terms of "a lovely, tall, red-haired lady" who once came to select a rug. She learnt later that lady was Rebekah Brooks, but has never seen her again.

"I suppose people like that don't have time to go shopping like normal people," she said.

"They're too busy flying off to Milan or Paris in helicopters for coffee or breakfast," she joked.

• A Permanent Economic Emergency