By Gregory Blachier and Gérard BonPARIS (Reuters) - Former French President Nicolas Sarkozy was placed under formal investigation on Wednesday on suspicions he tried to use his influence to thwart an investigation of his 2007 election campaign, the prosecutor's office said.
The step, which often but not always leads to trial, is a major setback to Sarkozy's hopes of a comeback after his 2012 defeat by Socialist rival Francois Hollande.
The conservative politician denies wrongdoing in a string of investigations where his direct or indirect implication has cast doubt on his viability as a candidate in the 2017 elections.
He is due to give a television interview at 1800 GMT.
Magistrates are looking at whether Sarkozy used his influence to secure leaked details of a inquiry into alleged irregularities in his victorious 2007 campaign. He is suspected of influence-peddling, corrupting officials, and benefiting from breach of professional secrets, the prosecutor's office said.
The first former president to spend time in police custody, Sarkozy, 59, was detained for 15 hours on Tuesday before being transferred to appear before investigating magistrates who will run the inquiry. He was then released without bail.
Sarkozy "has gone through other ordeals of this nature, he has always known how to fight," said Paul-Albert Iweins, the attorney for Sarkozy's own attorney, Thierry Herzog, who is also being investigated for influence-peddling along with a judge involved in the affair.
Iweins said the inquiry was weak as it relied on legally questionable phone taps of conversations between Sarkozy and Herzog as well as between Herzog and the president of the French Bar.
Sarkozy's allies cast doubts over the impartiality of one of the investigating magistrates, with Christian Estrosi, the mayor of Nice, telling France Info state radio that Hollande's government had whipped up "an atmosphere of hate".
Prime Minister Manuel Valls dismissed accusations of a plot.
Investigating magistrates have a unique and powerful role under French law, both gathering evidence and determining whether it is solid enough for a trial. After the inquiry, the magistrate can drop the case for lack of proof or "charge" the accused, sending the case to trial.
Influence-peddling can be punished by up to five years in prison and corrupting officials can trigger a sentence of up to 10 years.
It was the second time the ex-president, who lost immunity from legal prosecution a month after he left office in June 2012, has been placed under such a judicial probe. The first was in 2013 but magistrates later dropped the case against him.
WEB OF INQUIRIES
Six legal cases, including this one, hang over the ex-president's head, a shadow that many in his fractured UMP party believe compromises his ability to lead a comeback in 2017.
"This legal saga is disastrous," wrote the influential Le Monde daily in a front-page editorial. "Each of these episodes ... demonstrate that for its actors and the leading one in particular, the end justifies all the means." In the current affair, Sarkozy is accused of using his influence to get information on a troublesome legal inquiry into funding irregularities in his victorious 2007 election campaign.
Specifically, magistrates are looking to see whether Sarkozy tried to get a judge promoted to the bench in Monaco in exchange for information on that campaign funding inquiry, in which he was accused of exploiting the mental frailty of France's richest woman, L'Oreal heiress Liliane Bettencourt, for campaign funds.
Those accusations against Sarkozy were dismissed in October.
But as investigators last year used phone-taps to examine separate allegations that late Libyan leader Muammar Gaddafi funded the same campaign, they began to suspect that Sarkozy had kept tabs on the Bettencourt case, before he was dropped from it, through a network of informants.
Those suspicions prompted police to launch an inquiry in February, which led to Wednesday's events. Under French law, a suspect is not formally charged with a crime unless he is sent to trial.
(Writing by Alexandria Sage; Editing by Mark John, Toby Chopra and Anna Willard)