International Monetary Fund chief Christine Lagarde, facing a possible trial in France over a huge payout to tycoon Bernard Tapie, says her conscience is clear in the case, whatever happens.

In an exclusive interview with AFP, Ms Lagarde maintains that she adhered to the law when she presided over the payout as finance minister in 2008, and will make that clear if the case finally goes to trial.

"I have always had a good conscience, I've always acted in accordance with the law, and I've always had in mind the public interest," she stressed.

On Friday, just days before Ms Lagarde began her second five-year mandate to lead the IMF, a French prosecutor said she should stand trial for negligence in the Mr Tapie case.

While she was finance minister, a private arbitration panel accepted to pay the controversial businessman €404m in taxpayer money as compensation in his dispute with the state-controlled bank Credit Lyonnais over the handling of his sale of sports gear giant Adidas in the 1990s.

A court later declared the arbitration fraudulent because one of the arbitrators had links to Mr Tapie, now 73.

A decision on whether to go to trial is expected on 22 July.

If the order is upheld, 60-year-old Ms Lagarde will be tried in the Law Court of the Republic, which handles cases concerning offenses committed by sitting government ministers.

Ms Lagarde, who faces a year in jail if convicted as well as fine of €15,000, steadfastly denies wrongdoing or that she acted on then-president Nicolas Sarkozy's orders.

"It was not my duty to select the arbitration panel, to investigate their past and history, and I had no reason to doubt their probity and honesty," she told AFP in her Washington IMF office.

"I'm focused entirely on my mission at the IMF but if I'm sent to court I will make all those points very clearly."