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FILE PHOTO - French politician Francois Fillon, member of the conservative Les Republicains political party and his wife Penelope (L) attend a final rally ahead of the first round of vote to choose the conservative candidate for France's presidential election in Paris, France, November 18, 2016. REUTERS/Charles Platiau/File Photo

(reuters_tickers)

By Richard Balmforth and Ingrid Melander

PARIS (Reuters) - Frontrunner Francois Fillon faced a crisis in his campaign for the French presidency on Wednesday when prosecutors opened an inquiry for misuse of public funds after a press report that his wife drew a salary as his assistant but never actually worked.

Fillon, a right-wing former prime minister, said he was outraged at the report by the satirical weekly Le Canard Enchaine which he said showed "contempt and misogyny".

"I see the stink bomb season has started," the 62-year-old told journalists in the city of Bordeaux.

Fillon is running for The Republicans party in the presidential election on April 23 and May 7. While he faces a strong challenge from far-right leader Marine Le Pen, second in the polls, and from independent centrist Emmanuel Macron, Fillon has generally been seen to be on a smooth ride to the Elysee.

That lead could be affected by how he handles a crisis that risks denting his image as a devout Catholic and family man with a relatively scandal-free record in office.

Hours after Wednesday's report, financial prosecutors in Paris said they were opening an inquiry into misuse of public funds relating to the matter.

"Following the publication ... in the Canard Enchaine of a story calling Mrs Penelope Fillon into question, the financial prosecutor's office today opened a preliminary investigation into misappropriation of public funds, misuse of company assets and concealment of these offences," a statement said.

The opening of a preliminary investigation is a first step in the judicial process and does not mean that either Fillon or his wife will eventually be charged or even placed under formal investigation.

Fillon said in a statement that he wanted to meet investigators as soon as possible to establish the truth and defend his honour.

"This particularly fast decision (to open an investigation) will silence this campaign of slander and will put an end to these baseless accusations," he said.

It is common practice for French parliamentarians to employ wives, children and even mistresses in their office.

But the allegation that Fillon's British-born wife, Penelope, was paid for fake jobs - a charge to which he did not reply directly on Wednesday - could undermine his pledge to pursue an honest and transparent campaign and hurt his ratings as the race for the presidency gathers pace.

For the French voter, the case has echoes of similar past scandals over "phantom" jobs.

Alain Juppe, another former prime minister whom Fillon visited in Bordeaux on Wednesday, was convicted over use of public funds for fake jobs more than 10 years ago in a case that also led to conviction of former President Jacques Chirac.

CANDIDATE OF HONESTY

Polls have for months highlighted voter discontent with the political elite and any hint of improper use of public finances could worsen that perception at Fillon's expense.

Socialist former prime minister Manuel Valls, who hopes to win his party's ticket as presidential candidate, urged Fillon to explain himself on the matter.

"You can't be the candidate of honesty and transparency and not respond," Valls told France Inter radio.

Le Pen usually trades in voter distrust of mainstream leaders but she and other top FN officials remained very discreet. Asked to comment, Le Pen told Europe 1 radio she would not take part in "the politics of stink bombs."

Her own National Front party is under judicial investigation over allegations of improper employment of assistants by its lawmakers in the European Parliament.

Analysts were divided on how much the disclosures could affect Fillon's election fortunes.

With three months still to go before the April 23 first round, Fillon had time to shrug it off, said Frederic Dabi of Ifop pollsters.

But Fillon’s image of honesty was a key factor in him securing the Republicans' nomination, said Jean-Daniel Levy, of Harris Interactive pollsters, and he would run into trouble if voters now began doubting his character.

Le Canard Enchaine, which has lifted the lid on political shenanigans for decades, reported that Penelope Fillon had been paid 600,000 euros (£511,421) for many years of employment as a parliamentary assistant to him and later to his replacement as a National Assembly lawmaker, and for work at a cultural journal.

It said that its research had showed there was no evidence she had ever really worked.

Fillon's public relations team have emphasised there is nothing illegal about her working for her husband in the National Assembly.

They said her apparent lack of presence in the work-place by saying she preferred to work "in the background", in keeping with her self-effacing style.

Fillon and his wife, who is from Wales, were married in 1980 and have five children. Last October, she told a newspaper, Le Bien public: "Up to now, I have never been involved in the political life of my husband."

The image conveyed by glossy magazines and television shows is of a woman leading a country life and keeping home for her family in their 12th century chateau near Le Mans, west of Paris.

(Reporting by Claude Canellas in Bordeaux, Chine Labbe, Emmanuel Jarry, Sophie Louet, Brian Love and Leigh Thomas in Paris; Writing by Richard Balmforth; Editing by Alison Williams and Dominic Evans)

Reuters