PARIS - FRANCE'S richest woman, L'Oreal heiress Liliane Bettencourt, has been forced to insist she is of sound mind after she gave more than a billion dollars in gifts to a society photographer.

The top shareholder in the global cosmetics empire with a personal fortune estimated by Forbes magazine at US$23 billion ($33.1 billion), 86-year-old Bettencourt is one of the world's richest women and a well-known patron of the arts.

She has also, it emerged this month, donated a sizeable chunk of her vast fortune to Francois-Marie Banier, a Parisian painter and photographer to the stars and long-standing friend of Bettencourt and her late husband.

Over the past 15 years, the 61-year-old photographer received artworks, gifts and life insurance contracts worth a total of around a billion euros from his elderly friend.

Terrified of seeing the family billions frittered away, Bettencourt's only child, Francoise Bettencourt-Meyers, filed suit accusing Mr Banier of manipulating her mother.

Ms Bettencourt-Meyers, 55, who also sits on the L'Oreal board, accuses Banier of 'abuse of a vulnerable person', insisting her mother - known as a strong character - cannot have meant to throw away such a vast sum.

She took action early this year, following the death of her father Andre Bettencourt - a former minister under president Charles de Gaulle - but details of the case only emerged this month.

Her lawyer said she acted 'to make sure an unscrupulous individual had not taken advantage of her mother, profiting from acts of generosity that are surprising, to say the least'.

Interviewed by French fraud investigators at her mansion in the plush Paris suburb of Neuilly, Ms Bettencourt reportedly told them 'I can do whatever I like with my money'.

Banier, whose jet-set friends have included the playwright Samuel Beckett, couturier Pierre Cardin and Hollywood star Johnny Depp, reportedly told investigators Bettencourt was 'sponsoring' his work.

Investigators are close to wrapping up their probe and will shortly decide whether to press charges, judicial officials said.

According to officials, Bettencourt has so far refused to undergo a mental health exam. If judges decide to pursue the matter, they will be able to order a psychiatric evaluation with or without her consent.

A source close to the investigation described Bettencourt's state of health as 'faltering'.

Mounting media attention to the dynastic battle forced Bettencourt's estate on Wednesday to issue a statement to friends and L'Oreal staff, insisting she was sound of body and mind.

'Concerning recent reports in the press, Ms Liliane Bettencourt will make no comment. She does, however, wish to reassure her friends about her excellent state of health,' it said.

Bettencourt's estate said she was 'well aware that these articles could alarm L'Oreal employees' and wished to reassure them.

'She has long taken all necessary measures to allow the company to develop normally.'

Bettencourt, whose father Eugene Schueller founded L'Oreal in 1909, has long enjoyed the company of artists, and her Bettencourt-Schueller foundation has funded a range of films and art projects over the years.

Her foundation also supports medical research and literacy projects, awarding an annual life sciences prize of $300,000 to a young European researcher.

But the largest single donation recorded by her foundation was 12 million euros - a far cry from the sums donated to Banier, according to media.

Bettencourt and her daughter long worked hand in hand to manage the family's 30-per cent stake in L'Oreal, and retain control of the world leading group in the face of its second-biggest shareholder, the Swiss giant Nestle.

According to French media, the pair are no longer on speaking terms. -- AFP