The former French prime minister Dominique de Villepin was today placed under formal investigation - a first step towards possible criminal charges - over a smear campaign targeting his great political rival, Nicolas Sarkozy.

The urbane 53-year-old former diplomat was questioned for almost an hour by two judges probing the so-called Clearstream affair, in which Mr Sarkozy’s name was wrongly linked in 2004 to an illegal bank account in Luxembourg.

The judges placed him under investigation for "complicity to make false accusations", as a result of new evidence that suggests he may have actively encouraged the leaking of false information against Mr Sarkozy, a fellow Cabinet minister at the time of the scandal and his rival for the presidential nomination of their UMP party.

Judicial sources said that the preliminary charges against Mr de Villepin also include "receiving stolen goods, breach of trust and complicity to use forged documents".

The bizarre, complex case has shaken France’s political world and tainted the reputation of Mr de Villepin, once a star of the French Right.

The scandal started in 2004 when a judge received a mysterious CD-ROM accusing Mr Sarkozy and other top ministers of holding secret accounts purportedly created to hold bribes from a 1991 sale of frigates to Taiwan.

But investigators soon realised that the scheme was an elaborate hoax and turned their attention to uncovering the culprits.

Mr de Villepin, whose office and home were searched by the judges earlier this month, denies breaking the law. "I am anxious to restate this morning that at no point did I ask for an investigation into political figures, and at no moment did I partake in any political machination," he told reporters after his questioning today.

His lawyer said that he had refused to answer the judge’s questions in detail, telling them he needed first to read through the 26 volumes of evidence that they have compiled against him.

The new evidence against Mr de Villepin, who was replaced as premier in May after Mr Sarkozy took over as President, emerged in documents retrieved by experts from the computer of General Philippe Rondot, a former intelligence chief who conducted a secret inquiry into the affair in 2004.

That evidence is also said to implicate his boss at the time, the former president Jacques Chirac. Mr Chirac was last week questioned by another examining magistrate over a party financing scam dating from his time as mayor of Paris but his lawyer says that he will not answer questions over Clearstream because he is still covered by presidential immunity.

The bizarre, complex case has shaken France’s political world and tainted the reputation of Mr de Villepin, a longtime diplomat who was once a star of France’s conservatives. Mr de Villepin, who has been working on a new biography of his hero, Napoleon Bonaparte, returned from holiday in Tahiti to attend today's summons.

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