Sarkozy L'Oreal scandal sparks probe

French prosecutors have reportedly begun to investigate claims that President Nicolas Sarkozy's election campaign was secretly funded by a L'Oreal heiress.

French prosecutors have opened a preliminary investigation into allegations that the country's richest woman secretly funded President Nicolas Sarkozy's election campaign, a judicial official says.

The probe on Wednesday is a new blow to Sarkozy, who is rapidly losing support among French voters stung by the global economic crisis.

Sarkozy denies claims that his 2007 campaign received 150,000 euros ($A221,900) in secret cash from 87-year-old L'Oreal heiress Liliane Bettencourt and calls the allegations an effort to smear him.

But Sarkozy and his prime minister strained on Wednesday to keep their government and conservative party from unravelling amid a mushrooming scandal surrounding Bettencourt's fortune.

The scandal, including suggestions of large-scale tax evasion, first ensnared his labour minister and is now inching closer to the president himself.

On Wednesday, the prosecutor's office opened a preliminary investigation into statements by a former accountant for Bettencourt, Claire Thibout, the judicial official said.

Thibout told investigators that Bettencourt's chief financial adviser gave 150,000 euros ($A291,900) in cash to the treasurer of Sarkozy's conservative party UMP, Eric Woerth, in March 2007, the official said. Sarkozy was elected two months later.

Woerth's wife until recently worked as an investment adviser to the L'Oreal heiress, and Woerth himself is Sarkozy's labour minister and in charge of an unpopular pension reform set to raise the retirement age from 60 to 62.

Opposition politicians are demanding that Woerth resign amid the Bettencourt scandal, but Sarkozy has vigorously defended him.

Woerth, who has been treasurer for Sarkozy's conservative party for eight years, said Tuesday he was "outraged" by the claim and said he has "never received the slightest euro that wasn't legal."

Bettencourt is No 17 on Forbes magazine's list of the world's richest people worldwide.