IMF Chief Christine Lagarde has avoided immediate charges but was named an “assisted witness” after French prosecutors grilled her for two days over a state payout to a disgraced tycoon when she was Finance Minister.

Lagarde was questioned for a total of 24 hours by prosecutors working for a court that probes cases of ministerial misconduct over her 2007 handling of a row that resulted in 400 million euros ($ 515 million) being paid to controversial business figure Bernard Tapie.

“My status as assisted witness is not a surprise,” she told reporters as she left the Paris courthouse late yesterday.

“I have always acted in the best public interest and in accordance with the law,” said Lagarde, 57, who has consistently denied any wrongdoing.

“My explanations came as a response to the doubts that had been brought up regarding the decisions I had taken at the time,” she added.

While Lagarde avoided being placed under formal investigation — the closest equivalent in French law to being charged — her “assisted witness” status means she could still face further questions — and possibly charges — at a later stage.

Lagarde said she would now return to Washington and report to the board of the International Monetary Fund, which again expressed confidence in its first woman leader after learning of the court’s decision.

The chic Lagarde, considered one of the world’s most powerful women, won respect as France’s first female Finance Minister for her no-nonsense attitude, intellect and style.

Criminal charges against Lagarde would have been an embarrassment for the IMF, after her predecessor Dominique Strauss-Kahn, also from France, resigned in disgrace in 2011 over an alleged assault on a New York hotel maid.

“The board will be briefed again in the coming days,” IMF spokesman Gerry Rice said in a statement yesterday.

“The Executive Board has been briefed on this matter several times and on each occasion expressed confidence in the managing director’s ability to effectively carry out her duties,” he added.

The investigation concerns Tapie, a former politician, who went to prison for match-fixing during his time as President of French football club Olympique de Marseille.

Prosecutors working for the Court of Justice of the Republic (CJR) suspect he received favourable treatment in return for supporting Nicolas Sarkozy in the 2007 Presidential Election.

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