Blatter insists he will stay as FIFA president

Michel Platini, the powerful head of the European UEFA confederation who has been implicated in the investigation, also defended a two million Swiss franc ($2 million) dollar payment from the world body.

Blatter, 79, denied any "wrongdoing" in a meeting at FIFA headquarters.

"President Blatter spoke to FIFA staff today and informed the staff that he was cooperating with the authorities, reiterated that he had done nothing illegal or improper and stated that he would remain as president of FIFA," said the statement by his US-based lawyer Richard Cullen.

Swiss prosecutors say Blatter is the target of a probe into "criminal mismanagement" at FIFA, focusing on a 2005 television rights sale to the Caribbean Football Union and the Platini payment.

French football legend Platini has been questioned by Swiss investigators, but has not been named as a suspect.

The inquiry sent fresh shocks through world football, which has descended deeper into crisis since May, when the US justice department indicted 14 people over bribery in football deals worth more than $150 million dating back to 1991.

Four days after winning a fifth term as president on May 30, Blatter dramatically announced that he would stand down when a new election is held in February.

But media reports said FIFA's independent ethics committee was about to launch an inquiry which could force the suspension of Blatter and Platini.

The Swiss attorney general, in announcing the new probe, said the two-million Swiss franc ($2.05 million, 1.8 million euros) payment made in 2011 to Platini may have been illegal.

Platini defended the transaction on Monday, as the Frenchman hopes to separate himself from the stench surrounding FIFA while keeping his presidency bid on track.

Legitimate payment?

Both Blatter and Platini have said the former French star did work for FIFA from 1998 to 2002.

Swiss investigators have noted that compensation for the work was not made until a decade later and suggested the payment may have been "disloyal" to FIFA, meaning it amounted to an illegal use of the body's funds.

In a meeting with Swiss investigators on Friday, Blatter said the payments to Platini were "valid compensation and nothing more and were properly accounted for within FIFA", according to Cullen, a defence lawyer based in the US state of Virginia.

In a statement, Platini insisted the payment had been "fully declared by me to the authorities, in accordance with Swiss law".

Platini had been favourite to succeed Blatter at the special election called for February. But FIFA insiders and former officials have suggested that being mentioned in Swiss case could a major blow to his candidacy.

"I am aware that these events may harm my image and my reputation," Platini said, voicing eagerness to clear up any "misunderstandings."

Ethics committee's probe?

The Swiss investigation could take months to develop, but some have said that Blatter's more immediate problem is FIFA's own ethics committee, which could force him out at any time.

A spokesman for the committee told AFP at the weekend that the panel initiates a probe "if there is an initial suspicion", a bar which almost certainly has been cleared with respect to Blatter.

An ethics committee investigation would not automatically lead to Blatter's removal, but some believe it would.

"I expect Blatter to be suspended. There's no choice," said Guido Tognoni, a former FIFA staffer and Blatter advisor. "FIFA is in such trouble."

Aside from an open criminal file against its president, nine FIFA officials have been charged in the United States.

Blatter's former right-hand man, secretary general Jerome Valcke was suspended last week over allegations that he was aware of a black market ticket scheme surrounding the 2014 World Cup.

Meanwhile, with trust in FIFA falling to new lows, there have been calls for an outsider with a clean record to be named interim president.