French investigators have started an investigation into the nature of the work done by four of Mélenchon's six parliamentary assistants while he was a member of the European parliament from 2009-2017.
The move is in response to an accusation of malpractice made last month by National Front (FN) MEP Sophie Montel, who is herself under investigation on the same count.
The probe, which was opened on 22 March following previous tip-offs by Morel, had already targeted MEPs from several French parties, including right-wing former ministers Brice Hortefeux and Michèle Alliot-Marie and centrist Jean Arthuis, who is now a supporter of President Emmanuel Macron.
"It's time to say that a baseless accusation ins a malicious accusation," Mélenchon said at a press conference on Wednesday. "It's an offence. So this person is going to pay for it. As will everyone who has spread said false accusation."
Earlier, he insisted that none of his assistants had worked for the parties that he has led while he sat in the European parliament.
Separate inquiries into MoDem, FN
A separate inquiry has targeted members of Macron ally François Bayrou's MoDem, leading to the resignation of three ministers - Bayrou himself, Marielle de Sarnez and Sylvie Goulard.
Morel herself is one of several FN members accused of paying party workers with European parliamentary funds.
Party leader Marine Le Pen and ex-MEP Marie-Christine Boutonnet have been charged with breach of trust.
Explaining her decision to accuse Mélenchon, Morel claimed her party was the victim of "double standards".
"Jean-Luc Mélenchon poses as a white knight, always ready to lecture other people," she told Le Parisien newspaper. "Why doesn't the law look into his behaviour in the European parliament, as it does for us?"
After holding its own inquiry, the European parliament started deducting money from Le Pen's salary but she left a 300,000-euro debt behind her when she left to stand for the French presidency and, that bid having failed, for the French parliament, where she now sits.