Minister in charge of tax evasion quits – in tax row

Budget Minister Jérôme Cahuzac's resigns over allegations of an illegal Swiss bank account

Jérôme Cahuzac has not yet been formally accused of a crime (REUTERS)

The French minister responsible for cutting deficits and fighting tax evasion was fired last night amid criminal allegations that he had cheated on his own taxes.

The sacking of the Budget Minister, Jérôme Cahuzac, is a stinging embarrassment to President François Hollande as he struggles to balance the state's books and impose new taxes on the rich. Mr Cahuzac, 60, who was previously a highly paid plastic surgeon, had adamantly denied media accusations that he once had an illegal bank account in Switzerland. The state prosecution service said that the voice in a recorded telephone conversation from 2000, admitting embarrassment about an illegal Swiss account, appeared to be that of Mr Cahuzac. The Paris chief prosecutor said this afternoon that he had started a formal investigation into "the laundering of evaded taxes". He also announced a second investigation into allegations Mr Cahuzac, who had been a leading hair-transplant surgeon, received illegal payments from pharmaceutical firms.

Mr Cahuzac has not yet been formally accused but is expected to be placed under investigation by an examining magistrate in the near future. Within a few hours, the Elysée Palace announced that it had "put an end to the duties of Jerome Cahuzac". The minister said that he had resigned to permit the "orderly conduct of government" and to devote all his energy to fighting the allegations. "None of this alters my innocence nor the defamatory nature of the accusations made against me," Mr Cahuzac said.

As Budget Minister, Mr Cahuzac has been in the front line of the government's campaign to crack down on tax evasion and increase taxation of the rich as part of a drive to eliminate France's 30-year-old budget deficit over five years. He was also in charge of a drive to find €3bn (£2.6bn) emergency spending cuts in this year's budget and another €10bn next year. His job was given last night to Bernard Cazeneuve, the former minister for Europe.

Allegations that Mr Cahuzac, a late convert to politics, had an undeclared Swiss bank account until 2010 first surfaced on the investigative website Mediapart last year. In a reminder of recent events in British public life, several French newspapers have linked the allegations to a bitterly contested divorce between Mr Cahuzac and his wife, Patricia. Ms Cahuzac's lawyer has rejected any connection.