Lille:
Former IMF Chief Dominique Strauss-Kahn was questioned by French police for a second day on Wednesday over allegations that he took part in sex parties organized by a corrupt vice ring.
The 62-year-old former Socialist minister, who until last year was the frontrunner to replace Nicolas Sarkozy as President of France, was taken into custody on Tuesday in the northern city of Lille.
He was questioned all day then magistrates prolonged his detention for 24 hours. The interrogation could be extended again, but sources close to the investigation said that he was expected to leave custody later on Wednesday.
A magistrate will have to decide whether he will be released without charge or placed under formal investigation on charges of "abetting aggravated pimping by an organized gang" and "misuse of company funds."
If charged, he could be released on bail or remanded in custody pending a trial. Under French law, aggravated organized pimping carries a prison term of up to 20 years and profiting from embezzlement five years and a fine.
The wealthy international statesman, whose wife is an heiress and who normally lives at one of Paris most exclusive addresses, was held overnight in a Spartan 7.5-square-metre (80-square-foot) cell with a squat toilet.
Investigating magistrates want to know if he was aware that the women who entertained him at parties in restaurants, hotels and swingers' clubs in Paris and Washington were paid prostitutes.
They will also ask Mr Strauss-Kahn if he knew the escorts were paid with funds fraudulently obtained from a French public works company by his hosts.
Paying a prostitute is not illegal in France, but profiting from vice or embezzling company funds to pay for sex can lead to charges.
The former managing director of the International Monetary Fund admits he has an uninhibited sex life, but denies any role in pimping or corruption and has indicated that he will deny any criminal wrongdoing.
Lawyer Henri Leclerc has said that his client may not have known that he was with prostitutes as "in these parties, you're not necessarily dressed. I defy you to tell the difference between a nude prostitute and a nude woman of quality."
Two businessmen, Fabrice Paszkowski, a medical equipment tycoon with ties to Strauss-Kahn's Socialist Party, and David Roquet, former Director of a local subsidiary of building giant BTP Eiffage, have already been charged.
The pair has alleged links to a network of French and Belgian prostitutes centered on the Carlton Hotel in Lille, a well-known meeting place of the local business and political elite in a city run by the Socialist Party.
In all, eight people are facing trial in connection with the "Carlton affair", including three executives from the luxury hotel itself, a leading lawyer and the local deputy police chief, Jean-Christophe Lagarde.
The last of the sex parties is said to have taken place during a trip by a group from Lille to Washington between May 11 and 13 last year.
One day later, on May 14, Mr Strauss-Kahn was arrested in New York following allegations that he had subjected chambermaid Nafissatou Diallo to a brutal sexual assault in his hotel suite.
The case against him eventually collapsed when prosecutors began to doubt Diallo's credibility as a witness. Mr Strauss-Kahn returned home to France, but only to face further investigation and scandal.
First, 32-year-old French writer Tristane Banon accused him of attempting to rape her in 2003. Prosecutors decided there was prima facie evidence of a sexual assault, but ruled that the statute of limitations had passed.
Then, Mr Strauss-Kahn was linked to the Carlton case when escorts identified him to detectives probing cross-border Franco-Belgian vice ring run by pimp Dominique Alderweireld, known in the underworld as "Dodo la Saumure".