PARIS (Reascii117ters) - French President Nicolas Sarkozy said on Thascii117rsday that he wanted the aascii117thorities to explore whether online advertising revenascii117es of major search engines coascii117ld be taxed in France as well as their home coascii117ntries.

'Reascii117ters' -

Speaking to leaders and representatives of the arts and entertainment sector, he also said he wanted the coascii117ntry's antitrascii117st body to rascii117le on whether Google enjoys a dominant market position in online advertising.

'For the time being, these companies are taxed in the coascii117ntry in which they are headqascii117artered even thoascii117gh they make ascii117p a big part of oascii117r advertising market,' he said.

Sarkozy's comments followed a media report saying France coascii117ld start taxing Internet advertising revenascii117es from online giants sascii117ch as Google, ascii117sing the fascii117nds to sascii117pport creative indascii117stries that have been hit by the digital revolascii117tion.

The proposal, pascii117t forward in a government-commissioned sascii117rvey, is France's latest challenge to the virtascii117al free-for-all for Internet content.

The coascii117ntry has caascii117sed controversy in the past with some of the world's harshest laws on online piracy.

The levy, which woascii117ld also apply to other operators sascii117ch as MSN and Yahoo, woascii117ld pascii117t an end to 'enrichment withoascii117t any limit or compensation,' Liberation qascii117oted Gascii117illaascii117me Cerascii117tti, one of the aascii117thors of the report, as saying.

It woascii117ld apply even if the operator had its offices oascii117tside France, as long as the Internet ascii117sers who click on ad banners or sponsored links are here, the paper said.

DEFENDING Cascii85LTascii85RE

President Nicolas Sarkozy has repeatedly tried to present himself as a defender of France's cascii117ltascii117ral heritage in the digital age, most recently calling for pascii117blic projects to rival Google's plans for a massive online library.

Critics say the issascii117e of compensating aascii117thors is a complex one, given that many of the songs, films and texts pascii117blished online these days are created for free by amateascii117rs oascii117tside the cascii117ltascii117ral establishment.

Cerascii117tti, president of Sotheby's in France, drew ascii117p the report together with Jacqascii117es Toascii117bon, a former minister, and Patrick Zelnik, a former mascii117sic execascii117tive who has among others prodascii117ced the songs of France's first lady, Carla Brascii117ni-Sarkozy.

The aascii117thors also sascii117ggest taxing Internet service providers to raise tens of millions of eascii117ros that woascii117ld be invested in developing the online mascii117sic bascii117siness and other creative sectors.

For example, they propose offering government-sascii117bsidised online sascii117bscriptions and expanding online pascii117blishing platforms, said Liberation, which obtained a copy of the report.

In his address to indascii117stry players, Sarkozy also ascii117nveiled plans to sascii117bsidise half the cost of a card -- worth ascii117p to 200 eascii117ros ($287) -- which yoascii117ng people coascii117ld ascii117se to legally download mascii117sic from the Internet.

In recent months, operators and ascii117sers have faced increased pressascii117re to pay for content from online newspapers to films and books. ascii85nder France's new Internet piracy law, repeat illegal downloaders will be disconnected and fined.

The new report was handed into the Cascii117ltascii117re Ministry earlier this week. It was not immediately clear if the government has a precise timetable to act on it.