PARIS (Jan 13): The Paris prosecutor has launched a judicial investigation into possible cheating on exhaust emissions at carmaker Renault, a source at the prosecutor's office said on Friday.

Renault shares fell sharply on the news, which comes about two months after the government passed to the prosecutor the findings of an investigation by its consumer fraud agency, the DGCCRF.

Three judges have been looking into the matter since Jan 12, the source said. Whether the prosecutor's inquiry is followed by a trial is for those judges to decide.

The French investigation into exhaust emissions by Renault engines and whether they broke emissions laws was launched in the aftermath of the Volkswagen diesel emissions scandal.

Renault shares were down 2.9% at 1030 GMT, recovering from their worst losses after earlier falling over 4% to their lowest level in around a month, with the stock among the worst performers on the pan-European STOXX 600 index.

Renault was not immediately available for comment.