Christine Lagarde has pledged to remain in post at the International Monetary Fund (IMF) as she is placed under formal investigation in her native France.

The case purports to her alleged role in a long-running political feud dating, back to the IMF managing director's time as French finance minister.

Sources told the news agency Reuters that Ms Lagarde, who was previously questioned as a witness by magistrates in Paris, would appeal a decision to investigate her for alleged negligence.

Under French law, magistrates can place someone under formal investigation when they believe there are indications of wrongdoing but that does not always lead to a trial.

The case relates to the relationship between the government of former president Nicolas Sarkozy and a French tycoon who supported him in two elections.

Bernard Tapie was awarded €403m in a 2008 arbitration payment under Mr Sarkozy's presidency to settle a dispute with the now defunct, state-owned bank Credit Lyonnais.

Mr Sarkozy, who was placed under formal investigation two months ago, has denied any suggestions he attempted to interfere with judicial proceedings and claimed the allegations against him are politically motivated.