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PARIS (Reuters) - A French prosecutor decided on Tuesday to hold Orange <FTE.PA> CEO Stephane Richard for further questioning about his role in a 285 million euro ($376 million) payout made to businessman Bernard Tapie, a source close to the investigation said.
Richard has been held since Monday morning and judges have until early on Wednesday to decide whether he is put under formal investigation.
French authorities are investigating the government's decision in 2008 to award Tapie damages as part of his battle with now-defunct bank Credit Lyonnais over the 1993 sale of his stake in sports clothing firm Adidas <ADSGn.DE>.
At the time, Richard was chief of staff to then Finance Minister Christine Lagarde, who is now the head of the International Monetary Fund (IMF).
Richard has denied any wrongdoing.
French magistrates decided last month not to place Lagarde under formal investigation over her role in the payout made to Tapie, a supporter of Nicolas Sarkozy, France's president at the time the payment was made.
She was instead given the status of a "supervised witness" after two days of questioning on her decision to use arbitration to settle a legal battle between the state and Tapie.
Richard's contract at Orange - 27-percent owned by the government which also appoints its chief executive - is up for renewal next year.
($1 = 0.7579 euros)
(Reporting by Nicolas Bertin; Writing by Ingrid Melander; Editing by Louise Ireland)