Villepin's Paris house searched in smear probe

PARIS, July 5 (Reuters) French judges searched the house of former prime minister Dominique de Villepin today as part of an investigation into allegations of a smear campaign against President Nicolas Sarkozy, a judicial source said.

The so-called Clearstream scandal nearly tore apart Villepin's government last year following accusations that he had used the intelligence services to try to undermine Sarkozy, who was then interior minister and a fierce political rival.

Villepin has denied any wrongdoing.

Judicial sources said investigators had managed to retrieve documents deleted from the computer of an intelligence officer that quoted key suspects in the case as saying Villepin had told them to go after Sarkozy.

A judicial source said judges Jean-Marie d'Huy and Henri Pons, who are heading the investigation, had led a police search of Villepin's house in northwestern Paris today afternoon.

Villepin, who left office in May, issued a statement earlier in the day to denounce ''mendacious allegations''.

The scandal kicked off in 2004 when anonymous letters were sent to an examining magistrate alleging that Sarkozy and a group of senior left- and right-wing politicians held accounts in Clearstream, a financial clearing house in Luxembourg.

The money was said to be linked to the bribe-ridden sale of frigates to Taiwan in 1991, but the accounts proved bogus.

Investigations continued, however, leading to complaints by Sarkozy of an elaborate attempt to discredit him.

REUTERS SY HS2055