BORDEAUX, France (Reuters) - French former President Nicolas Sarkozy has not been put under formal investigation by magistrates looking into whether he received illegal campaign funds from France's richest woman in 2007, but has instead been designated a witness in the inquiry.
Magistrates questioned Sarkozy for 12 hours as they tried to establish if he had received illegal campaign funding from Liliane Bettencourt, heiress of the L'Oreal cosmetics empire, when he ran for president in 2007.
It was the first time since losing the presidency, and the legal immunity that went with it in May, that Sarkozy had been questioned about the scandal which could poison any future comeback bid, something many conservatives support.
The three investigating magistrates in the southwestern city of Bordeaux could have placed Sarkozy under formal investigation, a step that can, but does not necessarily lead to trial, but instead designated him a witness in the affair.
"At the end of this hearing, Nicolas Sarkozy was notified of his status as witness," said the Bordeaux prosecutor in a brief statement.
Being a so-called "assisted witness" means that unless new evidence is uncovered to place him under formal investigation, Sarkozy will not face trial at the end of the inquiry.
In one strand of a broader inquiry, magistrates are looking at 4 million euros of cash withdrawals from the Swiss bank accounts of Bettencourt.
Sarkozy denies any wrongdoing, but any drawn-out legal investigation could damage his chances of running on the 2017 presidential election, something one recent poll showed 52 percent of his party's supporters want.
That is two to three times more support than is enjoyed by either of the two men fighting to succeed him, Francois Fillon and Jean-Francois Cope. An unseemly leadership squabble between those two has deepened ideological rifts inside the centre-right UMP party.
As part of the inquiry into financial relations with Bettencourt, police raided Sarkozy's Paris residence and offices in July.
Initial suspicions were fuelled three years ago when a woman who worked as an accountant for the mentally frail Bettencourt, now aged 90, alleged that a large cash withdrawal was earmarked for Sarkozy's campaign.
The Bettencourt affair is not the only cloud on the horizon.
Lawyers are also demanding that Sarkozy explain himself in two other cases, one concerning the terms of a submarine sale to Pakistan and another concerning lavish spending on opinion polls by his office when he was president.
Since his election defeat to left-winger Francois Hollande, which pushed the UMP into opposition after a decade in power, Sarkozy has followed the career path of other former leaders such as Bill Clinton and Tony Blair as a star conference speaker.
(Additional reporting by Jean-Yves Saint-Ceran in Bordeaux and Thierry Leveque in Paris; Writing by Brian Love and Alexandria Sage; Editing by Jon Hemming)
Updated Date: Nov 23, 2012 08:55 AM