Christine Lagarde and Nicolas Sarkozy were embroiled in a new corruption inquiry on Sunday over the awarding of Legion d’Honneur for political favours.
The pair are already facing allegations that Ms Lagarde, the head of the International Monetary Fund (IMF), authorised a £270 million payout to a prominent supporter of the former French president when she was his finance minister.
Now Ms Lagarde is said to have recommended financial expert Xavier Musca for a Legion d’Honneur, France’s top civilian award, so that he would rule in the government’s favour over a bitter trade dispute in 2009.
A few months later, Mr Musca recommended that Mr Sarkozy’s government should not have to pay out 400 million euros (£315 million) compensation to the liquidated insurance company Itea.
Anti-corruption police in Paris have launched a preliminary inquiry after Christian Laurent, who ran Itea, filed a formal complaint against Mr Musca, who went on to become Mr Sarkozy’s Chief of Staff.
Mr Laurent has also indicated that he will take legal action against Ms Lagarde, although the complaint against her will have to be sanctioned by a dedicated legal body dealing with allegations against former ministers.