Had same problem with airbag light on my 2001 reg 406 1.9 hdi staying on all of the time with ignition on.Diagnostics indicated drivers Squib fault also. Tried all recomended rectification methods, to no avail. Eventually I was informed (by a guy at a car breakers yard) that if your indicator stalk was "sloppy", and instead of knocking OFF after a right turn, to the NEUTRAL position, it flicked itself into the LEFT turn position !!. The fault was in the combination unit intigrating the stalks for indicators,lights, washers, radio control etc, situated behind the steering wheel. Disconnect negative terminal from battery, wait 30 mins,remove airbag unit from steering wheel,disconnect wires,and remove steering wheel(mark wheel position to replace in same position when re-fitting.Dicconnect all cables to combination unit, remove and replace with either a new unit(expensive) or get one from a car breakers(as I did for £20), and BINGO !!!! PROBLEM SOLVED. Peugoet quoted me £1100.
dave mines, December 2006