Paris: Financial police searched French presidential candidate Francois Fillon's office in parliament on Tuesday, a parliamentary source said, part of an inquiry into his wife's income that has thrown the election wide open.
Fillon had been favourite to win the presidency for conservative party The Republicans until a week ago when a newspaper reported that his wife Penelope drew hundreds of thousands of euros in pay without doing any work.
Fillon has said she did work for the money, but an official inquiry has been opened, and an opinion poll published on Sunday showed rival independent centrist Emmanuel Macron has caught him up.
The scandal has also coincided with the choice of a hard-left presidential candidate by the Socialist party in Benoit Hamon, a move also seen as good for Macron's prospects.
A group of right-leaning Socialist lawmakers wrote in Le Monde newspaper on Tuesday that they could not back Hamon, the clearest sign yet that his appointment could tear the party apart, with some lawmakers tempted to join the Macron camp.
But it was the Fillon fake pay scandal, and his team's attempts to control it, that was centre-stage on Tuesday.
The Canard Enchaine's story on fake pay calls into question the squeaky-clean image that won him the party ticket for The Republicans over rivals who had legal issues overhanging their campaigns.
Separately from the search of his office, Fillon's lawyer sought to explain the payments on Tuesday.
"Francois Fillon had no constituency office while he was a member of parliament," his lawyer Antonin Levy told RTL radio.
"That role was filled from their home, and in your view who is at home... if there is no office? Penelope Fillon of course."
Le Canard Enchaine reported that Penelope Fillon - who had previously said in interviews that she did not get involved in her husband's political affairs - had been paid 500,000 euros ($534,000) from state funds as a parliamentary assistant to Fillon and his successor.
The newspaper said it could find no evidence that she had actually done any work. It also said she was paid a further 100,000 euros for very little work by a literary review, whose owner Marc Ladreit de Lacharriere was a family friend.
The payments involved were made over a period between ranging between 1998 and 2013, the newspaper said.
The Fillons and Ladreit de Lacharriere were all interviewed by the police leading the inquiry on Monday. Fillon has not denied the payments but has said her work was not fake.
He has said he will step down as presidential candidate should he be put under formal investigation.
An opinion poll by Kantor-Sofres on Sunday put Macron and Fillon almost neck-and-neck on 20-21 and 21-22 per cent respectively in the first round of the presidential election on April 23, with Fillon having lost ground compared with a month ago.
Only one of them would go through to the second-round runoff on May 7 against predicted first-round winner, Marine Le Pen of the far-right National Front.
There, either man would win the run-off easily with over 60 per cent of the vote, the poll said.
Le Pen meanwhile faced a funding showdown with the European Parliament on Tuesday as a midnight deadline it has given her to pay back 300,000 euros approached.
The parliament found that Le Pen had been paying her former chief of staff Catherine Griset with funds that rules say should be used only to pay assistants for the work as a EU lawmaker.
If she does not pay, she risks having her salary and allowances as an EU lawmaker cut back. Le Pen has so far refused to pay back the funds.