By Oana Lungescu BBC correspondent in Brussels

The European Commission is formally asking Edith Cresson to respond to allegations of fraud during her term as a commission member in the late 1990s.

Mrs Cresson, a former French Prime Minister, was accused of nepotism and corruption in a report that led to the mass resignation of the previous European Commission, in 1999.

This is the first time the European executive is taking steps against one of its former members.

A spokesman for the Commission said Mrs Cresson would be invited to comment on allegations that she had breached her obligations while commissioner for education and research.

Pension threatened

Allegations that she had hired her dentist, Rene Berthelot, to write a paper on HIV/Aids which was never delivered, were at the heart of the damning 1999 report.

The new Commission, led by Romano Prodi, came in promising reform. It launched disciplinary hearings against several officials, but this is the first time it has taken steps against Mrs Cresson.

Under European Union rules, she could be taken to the European Court of Justice. If found guilty, she stands to lose her generous pension and other benefits.

It is an unprecedented move meant to restore public confidence in EU institutions, but it may raise even more questions about how long it takes them to react to fraud in their own ranks.