By Ingrid Melander
PARIS (Reuters) - Ex-French President Nicolas Sarkozy's latest legal woes could be fatal to his already faltering comeback chances but the paradox is it's not good news for Socialist President Francois Hollande either.
Former Prime Minister Alain Juppe, Sarkozy's main rival for his conservative party's nomination for the 2017 presidentials, is set to receive a fresh boost, and he's a more consensual figure than Sarkozy, making him a bigger challenge for Hollande.
Sarkozy was placed under investigation late on Tuesday in a scandal over irregularities in his 2012 election campaign finances, further complicating his re-election bid at a time when he is already lagging Juppe in the polls.
He was not hit with the more serious charges of fraud, embezzlement and false accounting facing others in the same case, but the move means he faces months of legal procedure where his honesty will be questioned.
Sarkozy denies any wrongdoing but while the investigation is unlikely to unsettle his die-hard backers, who say he is a victim of judicial harassment, it is set to push more undecided right-wing voters to back Juppe.
"His candidacy is compromised," said Francois Miquet-Marty, head of Viavoice pollsters. "Investigations put his honesty in doubt and as Sarkozy banks a lot on his personal brand, on a direct connection with voters, this affects him all the more."
While Sarkozy's lawyer, Thierry Herzog, told Europe 1 radio that the investigation did not prevent Sarkozy - who has not yet formally declared his candidacy - running in the primary, others in his party said things were getting complicated.
"I believe in Nicolas Sarkozy's honesty," said Marc Le Fur, a lawmaker from Sarkozy's The Republicans party, denouncing "judicial harassment" against a man who has been targeted by a series of probes but who has never been convicted of any offense.
"But this being said, it does come at a complicated moment," Le Fur told Reuters.
Although the primaries are not until November, other contenders are already declaring their candidacy, potentially stealing a march on Sarkozy.
Analysts said Juppe's nomination was not in the bag -- Sarkozy has managed to brush aside other judicial woes -- but a comeback for the abrasive ex-president was looking increasingly unlikely.
"Juppe was already seen by Republicans sympathizers as the 'full-cover insurance' to ensure victory over the Left in 2017," said Frederic Dabi of Ifop pollsters. "This will be reinforced by the Sarkozy investigation."
The problem for Hollande, hobbled by deep unpopularity and anger with unemployment, is that polls show he would have a harder time qualifying for the second round of the 2017 presidential elections against Juppe than against Sarkozy.
Mild-mannered Juppe, who was prime minister in 1995-97, triggering national strikes with a welfare reform program, is very popular among undecided voters. He is also quite liked by left-wing voters who loathe the divisive Sarkozy, whose policies have increasingly veered to the right.
Sarkozy's woes and Juppe's rising chances are not good news for far-right party leader Marine Le Pen either, as opinion polls show Juppe would do better against her in the election. He is also less likely than Sarkozy to be challenged by a centrist candidate.
Sarkozy's rivals and their backers reacted cautiously on Wednesday, as did Hollande's government, all quite keen not to openly appear to be seeking to benefit from his problems.
But former party leader Jean-Francois Cope, another primary contender who has been declared in a witness in the same case, had told France 2 television on Sunday: "I wouldn't have considered being a candidate if I had been put under formal investigation."
(Additional reporting by Marine Pennetier and Emile Picy; Editing by Paul Taylor and Tom Miles)