French prosecutors opened an investigation into claims that Nicolas Sarkozy and his party received cash donations during his 2007 presidential campaign.
French prime minister Francois Fillon said today he would not be stampeded into an early cabinet reshuffle over alleged illegal campaign donations and launched a counter-offensive against the government's accusers.
The furore over alleged cash handouts by France's richest woman, Liliane Bettencourt, and her late husband, to conservative politicians has shaken president Nicolas Sarkozy and helped drive his approval rating to a record low.
A public prosecutor said he had ordered a preliminary police investigation into allegations made by Bettencourt's former bookkeeper, Claire Thibout, to police and in a media interview.
Ms Thibout's lawyer confirmed she told police she had withdrawn €50,000 to be given to current labour minister Eric Woerth as part of an alleged €150,000 cash donation for Mr Sarkozy's 2007 campaign. She said she did not witness the handover but was told of it.
"The prosecutor has opened a preliminary investigation into the allegations of the bookkeeper Claire Thibout," a spokeswoman for Nanterre prosecutor Philippe Courroye said.
Ruling centre-right politicians accused an investigative website of "fascist methods" and the opposition Socialists of mounting a "cabal".
Flanked by leaders of both houses of parliament, Mr Fillon told ruling UMP party lawmakers: "A reshuffle is not our political priority. I won't allow the government of France to be destabilised by those who seek to preach."
Mr Woerth, at the centre of the storm in his double role as a cabinet member and UMP treasurer, said in a statement he had filed a lawsuit for defamation over the allegations of illegal campaign funding. He did not say whether individuals were named in the complaint.
In an emotional prime-time television interview on Tuesday, he denounced what he called an "outpouring of hatred" against himself and said he was the victim of "a political cabal orchestrated by the Socialist party".
Ms Bettencourt's lawyer has not commented on the allegations.
Mr Woerth is in charge of leading a major pensions reform vital to reducing France's public debt and deficit. Some analysts say the scandal has weakened his ability to spearhead the reform and could fuel trade union protests against it in September.
Government backers flooded the airwaves to support Mr Woerth, reject calls for his resignation and blame the whole affair on a website that has published a string of disclosures and on the Socialists who have pressed in parliament for explanations.
Xavier Bertrand, leader of the UMP party, called the Mediapart website "a site that uses fascist methods", accusing it of publishing recordings of private conversations between Bettencourt and her wealth manager he said were taped illegally. A court authorised the website on July 1st to continue publishing the audio tapes.
Despite isolated calls for Mr Woerth to resign, or for Sarkozy to bring forward a cabinet reshuffle planned for October, the president seems determined to tough it out in the hope that the story will die away during the summer holidays.
Budget Minister Francois Baroin said he expected to receive on Friday a report from Finance Ministry inspectors on Woerth's role in Bettencourt's tax affairs, which the government expects will clear him of any impropriety.
Sarkozy aides said the president would make a statement yesterday after the cabinet adopts a bill on the pension reform designed to raise the retirement age to 62 from 60 from 2018, increase the contribution years required for a full pension and raise civil servants' contributions to the private sector level.
The government sought to discredit the Bettencourts' former bookkeeper, whom Fillon called "an anonymous witness who tells the media more than she tells the police and doesn't produce a shred of evidence".
The Socialists have largely refrained from seeking Mr Woerth's resignation and focused instead on questioning whether he solicited donations from tax exiles, whether he helped get his wife a job with Ms Bettencourt's wealth manager, and whether he failed to act on a prosecutor's letter raising suspicions about Ms Bettencourt's tax affairs.
Reuters