France's Villepin heard as witness in scandal case

PARIS, Dec 21 (Reuters) French Prime Minister Dominique de Villepin arrived at a Paris court today to be questioned as part of an investigation into an apparent smear campaign against conservative presidential frontrunner Nicolas Sarkozy.

Villepin was to be heard as a witness, not a suspect, in the so-called Clearstream affair that revolves around faked bank accounts and hushed-up government probes.

''I'm happy to be able to provide my testimony in a case in which many lies have been told and of which I've had to suffer in the past few years,'' Villepin told reporters this week.

Scores of police guarded the streets surrounding the courtroom near Paris's Opera house and the capital's large department stores ahead of Villepin's arrival. Judicial sources said the questioning could last all day.

The affair began when the names of Sarkozy and other prominent public figures appeared in a list of accounts at Clearstream, a Luxembourg finance house linked to kickbacks in the bribe-ridden sale of naval frigates to Taiwan in 1991.

The list quickly proved bogus but investigations into its authenticity continued, leading to complaints by Sarkozy and others that it was an elaborate attempt to discredit them.

Before becoming prime minister last year, Villepin ordered at least two separate investigations into the Clearstream case and did not inform the prime minister of the day or a judge separately investigating the affair, of his findings.

Villepin and Sarkozy are fierce rivals within the political right, but the prime minister has strenuously denied using the secret services to try to hurt his long-time foe.

He has told reporters that he was duty-bound to act when the allegations were brought to his attention during his time as foreign and then interior minister.

The scandal has heated up ahead of next year's presidential election, where Sarkozy is seen as the right's clear favourite to face Socialist party candidate Segolene Royal.

The announcement by magistrates earlier this month that Villepin was not suspected of wrongdoing in the affair has lifted a possible barrier to him challenging Sarkozy to become the right's candidate in 2007.

Villepin has not ruled out a bid but has repeatedly said he harbours no ''presidential ambitions''.

Defence Minister Michele Alliot-Marie, another potential presidential rival for Sarkozy, was questioned about the Clearstream case in November.She pushed for an early hearing to prevent the scandal derailing her political ambitions.

Villepin is the second prime minister of a major industrialised nation to face questioning in an judicial investigation this month.

British Prime Minister Tony Blair was questioned last week in London over allegations that state honours were handed out in return for loans to his party. Blair's office said he had been interviewed as a witness, not a suspect.

REUTERS SP VV1533