France faces another damaging health scandal after its medical authorities confirmed four deaths in the past 25 years were linked to an acne drug prescribed by doctors as a contraceptive.

Amid growing concern about third- and fourth-generation birth-control pills, a secret report by France's drug safety authority revealed 125 women had suffered "undesirable" and possibly life-threatening side-effects linked to Diane-35 or its generics.

Le Figaro newspaper, which obtained a copy of the confidential internal document, said 37 of the women had not fully recovered after taking the pills made by Bayer, the German pharmaceutical company. An estimated 4-5m boxes of Diane-35 are sold in France every year. The average age of the women affected is 25.

Dozens of lawsuits against third- and fourth-generation contraceptive pills – known in Britain as combined pills – have been launched in France by women who have suffered side-effects including blood clots and strokes. The French government has advised doctors to limit the prescription of some contraceptive pills, and will stop reimbursing patients the cost of those drugs from April.

Critics describe the move as folly, and accuse the government of blowing the problem out of proportion. In a statement on Sunday, the Agence Nationale de Sécurité du Médicament said Diane-35 had been authorised for sale in France since 1987, but only as a treatment for acne. It said it had looked into the side-effects of the drug and its generics and would publish its findings this week. It is also investigating doctors' prescription habits.

This month, as concern about the pills grew, Professor Dominique Maraninchi said: "Diane-35 is an acne treatment that also blocks ovulation. We have several inquiries going on that show that this non-authorised use is significant."

French medical authorities made headlines recently over Mediator, a diabetes drug widely prescribed by doctors as an appetite suppressant, which is believed to have killed at least 500 people. The head of the French pharmaceutical firm Servier, maker of Mediator, is under formal investigation for manslaughter, and the head of France's public health agency has resigned.

The row has highlighted the links between drug regulators and lobbying drug companies in France, which has one of the world's highest levels of consumption of prescription drugs.

Investigators are also looking into a second scandal over French-made faulty PIP silicone breast implants.

In 2003, Dr Eric Wooltorton, associate editor of the Canadian Medical Association Journal, warned about the risks of Diane-35, which is authorised for sale in 135 countries and sold in 116. He wrote the oral contraceptive with "anti-androgen properties" had been "heavily marketed" to young women and had seen its Canadian sales jump by 45% between 2000 and 2001.

"However, many physicians may be unaware of concerns about the drug's safety profile and the fact that it is not approved for use solely as an oral contraceptive."

He added that the UK Committee on the Safety of Medicines had issued a warning on the drugs risk of deep vein thrombosis in 2001.

"Diane-35 should be reserved for temporary use in women with serious acne and should not be used solely as an oral contraceptive. All women who use combination oral contraceptives are at risk of venous thromboembolism and should be informed of this rare but potentially serious adverse effect, particularly if they are taking Diane-35," Dr Wooltorton added.