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The stage is now set for a blockbuster political contest between France's two leading conservative rivals after a three-judge panel acquitted former prime minister Dominique de Villepin of secretly plotting a dirty-tricks campaign six years ago against Nicolas Sarkozy.

Mr. de Villepin was one of the most unpopular prime ministers in recent French history when he left office in 2007, upon the election of President Sarkozy. But his slander trial, as he once put it, has turned out to be a "political gift" that put him again in the limelight.

He has already started building a political machine and making public appearances that have all the hallmarks of an election campaign.

He has portrayed himself as the victim of a vicious personal vendetta by Mr. Sarkozy, whose own approval ratings as President have been in the doldrums for months.

Mr. de Villepin, who has no political or elective post, has also taken to describing himself as the best right-wing alternative to the right-wing Mr. Sarkozy. So far, he is the only figure in the fractious ruling right-wing party to openly attack the President on his overall record.

His acquittal, he said after the verdict, "was a victory of justice and law over politics."

The court decision was the epilogue to the complicated and sometimes burlesque saga known as the Clearstream affair that stretches back to 2003.

At the centre of the case was a faked list of prominent political and business figures who purportedly laundered bribe money from French arms sales in the late 1990s through a Luxembourg financial clearing house called Clearstream.

Mr. Sarkozy's name was on the list, as were the names of dozens of prominent French political, business and arts figures, and he was one of 40 civil plaintiffs in the slander and conspiracy trial.

The list passed through several sets of hands before Mr. de Villepin got it from a friend in early 2004, when he and Mr. Sarkozy were both ministers in the government of Jacques Chirac with rival presidential ambitions.

Prosecutors in the case said Mr. de Villepin knew, or should have known, that the list was forged, but that he did nothing to stop his friend from circulating it because he wanted damaging rumours about his rival to leak out.

The list of names inevitably ended up in print and was the subject of an investigation by judges looking into arms-sale bribes before it was discredited as a hoax.

Mr. Sarkozy also blamed Mr. de Villepin, reportedly vowing at one point to see that the people trying to discredit him with the Clearstream list "hang from a butcher's hook."

But the court, in its 326-page decision, cleared Mr. de Villepin of the charges of taking part in a plot, saying there was no evidence he had acted improperly. The President's office, after the verdict was announced, issued a statement saying that Mr. Sarkozy would not pursue the slander case further.

Mr. de Villepin's supporters said his acquittal in the Clearstream case will be a launching pad for a new political career. "Nothing can stop him now," said François Goulard, one of his allies in the ruling Union for a Popular Movement party.

Ten days ago, Mr. de Villepin ventured into Bondy, a town in the depressed suburbs northeast of Paris that was a flashpoint during the 2005 riots that erupted during his time as prime minister. Almost lost in a thicket of cameras and microphones, Mr. de Villepin attacked Mr. Sarkozy's "smugness" and criticized his economic policy.

But the next presidential election is still more than two years away. "He has no party, no money and practically no parliamentarians behind him," said Franck Louvrier, the President's communications director, in an interview with Le Monde. "No one is going to follow him."