UPDATE 1-Swiss bank CEO investigated in tax case told to stay in France
* Bank under scrutiny in case of French politician
* French authorities investigate secret Swiss bank accounts (Adds detail, background)
ZURICH Dec 6 (Reuters) - French authorities have told the head of Swiss private bank Reyl & Cie not to leave France after widening an investigation into possible tax evasion, the bank said on Friday.
Francois Reyl and his father Dominique, Reyl & Cie's chairman, were put under formal investigation in October on suspicion that the bank helped a French cabinet minister to hide undeclared assets in a secret Swiss bank account. The minister, Jerome Cahuzac, stepped down in March.
A second formal investigation targeting Francois Reyl was announced on Thursday, aiming to clarify whether the bank had laundered funds hidden from French tax authorities. It follows the questioning of a former employee of the bank in April by magistrates.
"The chief executive, Francois Reyl, was questioned by French investigating magistrates yesterday afternoon related to a procedure involving a small number of clients," the bank said in a statement.
It said there were disagreements between France and Switzerland as to whether Swiss banks could be held responsible if their French clients hid money from their country's taxman.
"The bank is shocked its chief executive has been put under formal investigation and banned from leaving the country and exercising his role as director general," bank Reyl said.
Francois Reyl, who is a French citizen, could not immediately be contacted for comment.
A spokeswoman for Reyl & Cie declined to comment. The Geneva-based bank has repeatedly denied wrongdoing.
An official at the French prosecutor's office told Reuters the second formal investigation of Francois Reyl launched by magistrates on Thursday focused on whether the bank laundered funds hidden from tax authorities in a small number of accounts.
The former employee of Reyl who was questioned in April, Pierre Condamin-Gerbier, had said he held a list of French politicians with undeclared funds in secret Swiss accounts.
Reyl filed a criminal complaint against Condamin-Gerbier in June alleging theft, falsification of documents and violation of professional and commercial confidentiality.
Condamin-Gerbier was arrested in July on his return to Switzerland. His lawyer said in August that his client had made up the claims about the list of politicians' secret accounts in a misguided attempt to alleviate pressure on himself.
He was released on bail in September.
Switzerland has come under growing international pressure to change its banking secrecy laws, which other governments say enable many of their wealthy citizens to avoid taxes. (Reporting by Silke Koltrowitz; additional reporting by Gerard Bon in Paris and Stephanie Nebehay in Geneva; editing by Mark Potter and Tom Pfeiffer)