PARIS The conservative UMP party of former French president Nicolas Sarkozy must cut running costs and seek new credit accords with its banks to wind down some 80 million euros ($109 million)(63.63 million pounds) of debt, an independent audit concluded on Tuesday.
The UMP, France's main opposition party, is already at the centre of a legal inquiry into whether party officials used its books to cover up millions of euros of overspending on Sarkozy's failed 2012 election campaign.
While Sarkozy denies wrongdoing, it is one of a string of legal troubles hanging over the party and casting doubt over his hopes to come out of retirement and stand for president in 2017.
Opponents, including from among Francois Hollande's ruling Socialists, have used the UMP's funding woes to argue that it could not again be trusted with running the euro zone's second largest economy.
"This audit is intended to give total transparency into the UMP's accounts and provide an analysis that should guarantee the survival of the movement," the UMP said in a statement.
The audit by an external firm of accountants put total debt at 79.1 million euros, half from the purchase and refurbishment of new party headquarters in Paris three years ago and the rest accumulated over the years to the end of 2013.
A senior UMP official acknowledged in May the existence of funding "anomalies" to cover up spending overshoots in Sarkozy's 2012 campaign, an admission which triggered the resignation of party chairman Jean-Francois Cope. Local media have put the campaign cost over-runs at up to 17 million euros.
The audit concluded the party could pursue its activities but added: "That assumes a renegotiation of banking deadlines for 2017 and a tighter marshalling of party expenses."
Party activists are due to choose a new leader at a congress scheduled for November, although it is not clear whether the new party chairman will automatically be its presidential candidate.
Sarkozy, who remains a favourite with conservatives but is less popular with middle-of-the-road and left-wing voters, has said he will make his intentions known by early September.
He faces possible challenges for the UMP ticket from former prime ministers Alain Juppe and Francois Fillon.
(Reporting by Gregory Blachier; writing by Mark John; Editing by Mark Heinrich)