She was finance minister in President Nicolas Sarkozy's government at the time of the compensation award to Bernard Tapie for the sale of a firm.

Mr Tapie supported Mr Sarkozy in the 2007 presidential election.

Ms Lagarde's lawyer described the court's decision as "incomprehensible", and said the IMF boss would appeal.

In a statement she said she had "always acted in this affair in the interest of the state and in respect of the law", according to AP.

Mr Tapie was once a majority shareholder in sports goods company Adidas but sold it in 1993 in order to become a cabinet minister in Francois Mitterrand's Socialist government.