President suffers blow amid claims against Ferrand, the first MP to quit Socialist Party and join En Marche! last year.

Prosecutors in France have launched an investigation into a 2011 property deal involving Richard Ferrand, minister for territory cohesion and a crucial ally of President Emmanuel Macron.

Eric Mathias, state prosecutor for Brest, said on Thursday the investigation would seek to establish the full facts surrounding the deal and determine whether they might involve any contravention of the law.

A French investigative newspaper reported last week that an insurance fund headed by Ferrand in his native Brittany – where he is an MP – agreed in 2011 to rent a building from his partner Sandrine Doucen.

Ferrand has repeatedly defended his actions, saying that the deal with his partner was the best of three offers presented to the insurance fund Mutuelles de Bretagne, which runs on public money.

Prosecutors initially waved away the allegations, saying there were no grounds for an investigation but on Thursday announced they changed their minds in light of “extra elements that could implicate” Ferrand.

Ferrand was the first member of parliament who quit the Socialist Party and join President Macron’s movement En Marche! in 2016, becoming secretary-general of the new party.

Macron himself promised tough political ethics legislation and was elected on a mandate to renew France’s political elite.

Macron’s rivals on the left and right have seized on the controversy to try to win back ground lost to the centrist in the run-up to the June 11-18 parliamentary vote.

The conservative Republicans party, still smarting from the defeat of its corruption-accused candidate Francois Fillon in the presidential election, has accused Macron of ethical double-standards – as has Marine Le Pen’s far-right National Front (FN) and the Socialist Party.

Le Pen, who was runner-up to Macron in the presidential vote, said the Ferrand affair “looks terribly like the Fillon affair”.

More revelations

Beyond the allegations about the property deal, Ferrand has also been left red-faced by revelations that he hired his son as his parliamentary assistant for four months in 2014.

Other allegations against Ferrand say that his former wife had received lucrative contracts with the insurance fund while he was managing it.

He also stands accused of hiring a taxi driver as his personal parliamentary assistant.

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This man is the husband of Joelle Salaun, Ferrand’s successor at managing the insurance fund.

Finally, Ferrand could also be accused of conflict of interest.

He resigned from managing the insurance fund once he was elected to parliament, but still retained a paid so-called chief of mission position with the public company.

The first law Ferrand pushed through parliament concerned the organisation of care networks for public insured funds.