I have nothing to hide

Jacques Chirac

Mr Chirac has been asked to explain how he came up with 2.4m francs ($312,000) in cash to pay for family holidays in the early 1990s when he was mayor of Paris.

Mr Chirac said the trips were all legal and settled with banknotes for security reasons.

The payments were uncovered by magistrates investigating public works contracts during Mr Chirac's 18-year term at Paris city hall.

'Astonished'

"The trips were made legally. They were invoiced... and they were paid for out of my personal allowances," Mr Chirac told the journalists questioning him in the traditional annual interview.

Asked about allegations that the money may have come from other, illicit sources, he said: "I have nothing to hide."

The French president is under growing pressure

Mr Chirac said the money had been paid for both private and professional travel, and to reward a number of close aides, but that he was "astonished" by the total sum involved.

"There were trips which were made by certain associates of mine who had themselves - admittedly through my travel agent - arranged and paid for them. And, above all, there were a whole set of trips in the name of people whom I had never heard of," he said.

In his first public comments on the allegations, Mr Chirac called for a freeze on the system of so-called "secret funds" which are at the disposal of prime ministers and not subject to any control.

France's "special funds" were set up more than 50 years ago as a sort of official slush fund.

'Scandalous'

Last week, his daughter Claude was questioned by investigators about several trips, including an official trip to New York on Concorde with her father.

He said the decision to summon her - one of his top advisers - was "scandalous" and that he had been "profoundly wounded" by the treatment of his family in the recent scandal.

Claude Chirac was questioned by investigators last week

The Bastille Day festivities are normally one of the high points of the president's calendar as he reviews the traditional military parade down the Champs Elysees.

The president's interview focused as expected on issues such as crime, unemployment and the state of the economy.

Mr Chirac also declined to say whether he would run for the presidential election to be held in nine months' time.