French Labour Minister Eric Woerth, at the centre of a furore over alleged illegal political donations, stepped down as treasurer of the ruling centre-right UMP party on Tuesday, sources close to him said.

President Nicolas Sarkozy, seeking to draw a line under a scandal that has shaken public confidence, said in a television interview on Monday he had advised Woerth to drop the treasurer role and focus exclusively on enacting a major pension reform.

Sarkozy said Woerth had been "cleared" by the finance ministry's tax inspectorate of any meddling in the tax affairs of France's richest woman, Liliane Bettencourt. However, police are investigating allegations that he took a large illegal cash donation from the Bettencourts for Sarkozy's 2007 presidential campaign.

Reuters