A French Muslim butcher at the centre of a firestorm over polygamy was charged on Wednesday with welfare fraud and his four companions will also face charges, a prosecutor said.

Lies Hebbadj, who runs a halal butcher shop in the western city of Nantes, made headlines after his wife was fined for driving in her full-face veil in April.

Interior Minister Brice Hortefeux had threatened to strip the Algerian-born man of his French passport after accusing him of polygamy, which is illegal in France.

Following a nearly two-month investigation, Hebbadj has been charged with welfare fraud and violating labour laws, Nantes prosecutor Xavier Ronsin told a news conference.

The 35-year-old was placed under judicial control, forced to hand in his passport and pay a 10,000 euro (12,000 dollar) bail before leaving the court house in a police van, hidden from journalists.

His four companions including his wife will be summoned to appear before a magistrate soon to also be formally charged with welfare fraud, said the prosecutor.

The charges stem from a number of alleged violations showing that Hebbadj cashed in on welfare benefits to which he was not entitled, the prosecutor said.

Two of his companions lived in Dubai for a year while continuing to receive welfare benefits worth 10,000 euros in France.

Hebbadj fathered 15 children and soon will have 17 with the women who received benefits over the past three years totaling 175,000 euros.

Many of the women and children lived under the same roof and Hebbadj used his companion's debit cards to access funds from the social security payments, according to the prosecutor.

Hebbadj is also charged with hiring 13 foreigners and foreign students to work in his shop without proper visas, he added. The employees were paid below minimum wage.

Police stopped Hebbadj's 31-year-old wife in Nantes on April 2 and fined her 22 euros (29 dollars) on the grounds that her niqab restricted her view so she could not drive safely.

The wife, Sandrine Mouleres, is to appear in court on June 28 to formally challenge the police fine.

The controversy over Hebbadj and his wife came as parliament is preparing to debate next month a bill banning the wearing of the full-face veil that has raised broader questions about Islam's place in France.

President Nicolas Sarkozy's critics have accused him of pandering to the far-right by resorting to measures such as the ban on the full Islamic veil that are seen as targeting immigrants.

The government earlier this year sponsored a major debate on national identity that revealed France's anxieties about immigration.