L’Oreal brand ambassadors Sonam Kapoor and Aishwarya Rai Bachchan

Paris, Dec. 28: In a heart-warming Christmas tale, the mother and daughter of one of France’s wealthiest and most powerful dynasties have ended their feud that had sucked in even the country’s President.

As Liliane Bettencourt, heiress to L’Oreal and France’s richest woman, announced that she had put aside her differences with her estranged daughter Francoise Bettencourt-Meyers, relief coursed through the French establishment.

Their quarrel had threatened to topple L’Oreal (fronted by the squabbling Aishwarya Rai and Sonam Kapoor) — a jewel in the French industrial crown — and had spiralled into the biggest scandal of Nicolas Sarkozy’s presidency.

The reunion sparked talk of a fairy-tale finale to Dallas-sur-Seine (Dallas on the Seine), as the saga that had gripped France since the summer had been dubbed, named after Dallas, the popular American TV series about intrigues in a Texan oil family.

But Sarkozy has been badly damaged by the links that emerged between his government and the Bettencourt billions, which have become an acute political embarrassment at a time of economic strife.

They are largely responsible for shifting the French political fulcrum to the left amid a growing campaign to impose pay limits on company executives.

It also became clear that the French authorities would go to great lengths to prevent L’Oreal from falling into non-French control. Under a 1974 shareholder pact, Nestle, the Swiss food giant, has a 29.8 per cent stake in L’Oreal and cannot take a bigger slice until six months after Liliane’s death. The dispute heightened speculation that Francoise would sell to Nestle as soon as she could, a prospect that appalled Sarkozy.

“I don’t want L’Oreal, (with) sales of euros 17 billion and 64,000 employees, to go to another country,” he said.

For Liliane, it came as a shock to be at the heart of high-level intrigue. She is the daughter of Eugene Schueller, who founded the company that evolved into the world’s cosmetics market leader, with brands including Maybelline and The Body Shop.

Liliane had always kept a well-informed eye on her estimated euros 17-billion fortune and on the company, in which she remains the biggest shareholder with a 31 per cent stake. But the death in 2007 of her husband, Andre, left her adrift.

She turned for help to Francois-Marie Banier, a high-society photographer, and showered him with gifts — works of art, annuities and even an island in the Seychelles — with a value of euros 1 billion. Her daughter filed a lawsuit alleging that Banier was exploiting the widow. Liliane was furious and in turn took legal action against Francoise for alleged harassment.

Adding to the animosity was a second row over the role of Liliane’s son-in-law, Jean-Pierre Meyers. Francoise wanted her husband to run Thetys, the Bettencourt family holding. Liliane did not. The stand-off lasted three years amid concern over its impact on L’Oreal.

Last summer, concern became panic. Pascal Bonnefoy, Liliane’s long-standing butler, recorded her conversations with lawyers and financial advisers and passed the recordings to Francoise.

The tapes contained a series of stunning revelations. They revealed, for example, that Liliane had placed tens of millions of euros in a Swiss bank account on the advice of Patrice de Maistre, her wealth manager. Eric Woerth, a member of Sarkozy’s government, who could have ordered a tax-evasion inquiry, angrily denied allegations that he had turned a blind eye in return for a helping hand or two — a job for his wife and funds for Sarkozy’s centre-right movement. But the President dropped him from the cabinet.

Left-wing sociologists said the scandal had infuriated public opinion and helped to put class war back on the political agenda. A campaign to introduce a maximum wage is just one of a raft of measures winning support in opinion polls as a result.

The reconciliation this month between Liliane and Francoise came partly after lawyers told them that they faced years of litigation if they pursued their quarrel — and after Sir Lindsay Owen-Jones, L’Oreal’s British chairman, wrote to both urging them to consider a fresh start. Under the agreement, de Maistre was replaced as Liliane’s wealth manager, Banier returned most of the presents he had received, and mother and daughter withdrew their lawsuits.

Jean-Pierre Meyers got the job as managing director of the Bettencourt family holding even though the butler tapes made plain Liliane’s fears that her son-in-law would manoeuvre to sell L’Oreal to Nestle if he got a chance.

If she is right, chapter two of ’affaire Bettencourt may not be far away.

THE TIMES, LONDON