The beleaguered government said there was "no case" to answer to as opposition political parties encouraged the probe, calling it the "tip of the iceberg" of nefarious defense contracts in Malaysia.

The case, concerning the 2002 sale of two Scorpene submarines made by the French shipbuilder DCN was brought to fore by a Malaysia rights group that claimed the French company paid $150 million in kickbacks to a company called Perimekar.

Malaysia took delivery of the first submarine last year, with the second expected from France next month.

Perimekar is owned by the wife of Abdul Razak Baginda, a former aide and close friend of the Malaysian Prime Minister Najib Tun Razak.

The local rights group Suaram filed two complaints with French prosecutors in connection with the allegations.

"It is their right to investigate but, for us, there is no case," a Malaysian government spokesman was quoted as saying by Defense News. "This is not a new issue. It is a concerted and continued effort by the opposition to discredit the premier."

It wasn't immediately clear whether the Malaysian authorities and government would cooperate with the French probe.

Baginda, the defense minister at the time that the controversial deal was sealed, has been acquitted of charges of abetting the 2006 killing of his mistress. He has repeatedly denied any criminal wrongdoing.

Still, the latest probe could embarrass the country's prime minister as he struggles to consolidate his power a year after taking office.

The investigation is the first legal action linked to the controversial submarine deal despite a tirade of criticism and allegation of corruption launched by opposition political parties.

The French probe was launched on grounds that "Perimekar was formed only a few months before the contract was inked, had no track record in submarine services and didn't have the financial ability to support the contract," Taiwan News reported.

The probe was opened as part on an ongoing investigation against DCN over a string of defense deals in Pakistan and Taiwan.

The Malaysian government has spurned allegations of paying Perimekar any commission but that the company has a 6-year contract to provide support services for the submarines.

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