Labour Minister Eric Woerth, who handled tax matters while he was budget minister, is already entangled in a financial scandal, linked to L'Oréal heiress Liliane Bettencourt.
The French daily published parts of a letter signed by Woerth in April 2008 which it says proves "without ambiguity that he used all the weight of his office" to obtain 27 million euros in tax breaks on the inheritance of sculptor César Baldaccini, known as César.
The Labour Ministry Wednesday rejected the report as containing "serious errors" and maintained no laws were broken, though it did not deny that Woerth had intervened in the case.
The Libération story says Woerth's move in the inheritance case came after intense lobbying by Alain-Dominique Perrin, an important financial supporter of President Nicolas Sarkozy's UMP party.
Woerth, who was UMP party treasurer at the time, is at the centre of probes linked to 87-year-old billionaire Bettencourt, over allegations she illegally bankrolled President Nicolas Sarkozy's 2007 election campaign and sought to evade taxes.
Woerth has denied any wrongdoing and any conflict of interest in his then-role as UMP budget minister and fundraiser. He has refused to resign as labour minister but stepped down as party treasurer in July.