French PM says he will not resign over scandal

PARIS, May 2 (Reuters) French Prime Minister Dominique de Villepin today said he would not resign over an alleged smear campaign that involves top politicians.

''Nothing justifies a departure today,'' Villepin told Europe 1 radio. French media have been speculating for days that he might have to step down over the affair, which apparently aimed to discredit his rival, Interior Minister Nicolas Sarkozy.

''I am ready to respond to all questions I could be asked,'' Villepin said, adding he had been shocked by the accusations made against him.

The affair began with anonymous charges in 2004 that Sarkozy and other politicians had accounts in a Luxembourg-based finance house, Clearstream, and linked them to a bribe-ridden sale of French frigates to Taiwan in 1991.

The list quickly proved bogus. A judicial inquiry has since concentrated on finding out who authored it and whether top government officials delayed clearing the accused left- and right-wing politicians' names as a way of discrediting them.

Villepin and President Jacques Chirac have denied any involvement in the scandal. Villepin and Sarkozy are in open competition for the nomination as the main conservative candidate in the 2007 presidential election.

Villepin today ruled out holding early elections over the scandal.

The scandal gained steam last Friday, when Le Monde newspaper quoted a senior intelligence official who investigated the scandal as saying Villepin had told him that Chirac wanted the confidential probe to focus on Sarkozy.

The official, Philippe Rondot, denied the report today.

''Villepin never asked me to get interested in politicians,'' Le Figaro newspaper quoted Rondot as saying.

REUTERS OM DS1340