President Nicolas Sarkozy’s office and government spokesman Luc Chatel denied the allegations in the investigative newspaper Le Canard Enchaine but the Socialist and Green parties seized on the matter to demand clarification.

“It’s totally crazy,” an official at Sarkozy’s office said of the matter, the latest twist to a standoff between the media and the Elysee palace over inquiries into the country’s richest woman and her links to Sarkozy’s UMP political party.

Le Canard Enchaine said Sarkozy personally asked the head of national intelligence services, Bernard Squarcini, to keep tabs on journalists and that the latter recruited a squad of former intelligence services staff to tackle the issue.

The Socialist Party, the largest opposition group, said that Squarcini should be summoned to explain the matter to members of Parliament at the National Assembly’s legal affairs committee.

“What’s been revealed is extremely serious,” Marie-Pierre de la Gontrie, Socialist Party spokeswoman on justice issues, told reporters. “This all needs to be clarified. Suspicion is always very toxic in a democracy.”

Green party chief Cecile Duflot called for the creation of an independent commission of inquiry into the allegations.

Le Monde newspaper accused Sarkozy’s office in mid-September of deploying the secret services in breach of press freedom laws to trace the source of leaks to the media about inquiries into the finances of L’Oreal heiress Lilliane Bettencourt.

Online news website Medipart, behind key revelations in the early days of the Bettencourt saga, recently reported a theft of computer-stored recordings from its offices on the night of Oct. 7-8.

Journalists at Le Monde and weekly Le Point that have delved into the Bettencourt affair have also reported computers stolen, in the first case from the journalist’s home and in the latter case from the publication’s offices.