French Prime Minister Dominique de Villepin said this morning he would not resign over an alleged smear campaign that involves senior politicians.
The scandal began with rumours that circulated in 2004 that Interior Minister Nicolas Sarkozy and other politicians held accounts in a Luxembourg-based finance house, Clearstream, and linked them to a bribe-ridden sale of French frigates to Taiwan in 1991.
The list was quickly proved to be false. A judicial inquiry has since focused on finding out who authored it and if top government officials delayed clearing the accused left- and right-wing politicians' names as a way of discrediting them.
President Jacques Chirac and Mr de Villepin have denied any implication in the Clearstream smear against Mr Sarkozy, a presidential hopeful and Villepin's rival.
"Nothing justifies a departure today," Mr Villepin told Europe 1 radio. French media have been speculating for days that he might have to step down because of the affair.
Mr Villepin and Sarkozy are in open competition for the nomination as the main conservative candidate in the 2007 presidential election.
The political uproar has increased since Le Mondenewspaper quoted a senior intelligence official who is investigating the scandal as saying Mr Villepin had told him that President Jacques Chirac wanted the confidential investigation to focus on Mr Sarkozy.
Mr Villepin has already been weakened politically by his defeat earlier this month over a youth jobs law, and last year three weeks of rioting by disaffected youths in poor suburbs hit the country.