PARIS • France's financial prosecution office has opened an embezzlement investigation into Mr Francois Fillon, a leading presidential candidate, following a newspaper report that his wife was paid around €500,000 (S$761,000) in public money for a no-show job - a revelation that could upend the tightly contested election.

Mr Fillon, who won November's centre-right primary, has been considered a favourite in the race but now must contend with questions about whether the payments to his wife during his government career were inappropriate.

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

According to the satirical weekly Le Canard Enchaine, Mr Fillon's wife Penelope received about €500,000 over eight years, first as his parliamentary assistant and then as assistant to his deputy Marc Joulaud, who took over when Mr Fillon became a government minister in 2002.

It is not illegal in France for Members of Parliament to employ family members, and around 10 per cent to 15 per cent do so, according to French media. But if Mrs Fillon did nothing - in effect, holding a fake job in return for public funds - her husband could be in trouble.

Mr Fillon, a right-wing former prime minister, said he was outraged at the report, 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.

In a statement later on Wednesday, Mr Fillon said that he hoped to be interviewed by investigators "as soon as possible" to "set out the truth". He added that the claims were "baseless".

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

"This is no small matter and anything could happen," said Dr Gerard Grunberg, a senior researcher at the Paris Institute for Political Sciences. "This affair hurts Mr Fillon's political image, which was built on transparency and old-fashioned respectability."

In its report, Le Canard Enchaine quoted one of Mr Joulaud's assistants as saying: "I never worked with (Mrs Fillon)."

The source added: "I knew her only as the minister's wife."

Mr Manuel Valls, who is making a bid to be the Socialist Party's presidential candidate, said Mr Fillon had to "explain himself".

"You can't say you're the candidate of honesty and transparency and not be able to respond to these issues," the former prime minister told the France Inter radio station on Wednesday.

Mr 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."

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

NYTIMES, REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG