France's intelligence services have unearthed a case of suspected industrial espionage at an engine subsidiary of French aerospace and defense firm Safran, Le Monde newspaper said in its weekend edition.

A Safran spokeswoman declined to comment on Sunday when contacted by Reuters about the report, which spoke of a Chinese link.

The newspaper said investigators had placed about 10 people in custody as they dig for information about a 2010 attack on the computer networks of Safran subsidiary Turbomeca, which makes helicopter engines.

It said hackers broke into the computer networks and gained access to sensitive information about propeller systems at Turbomeca, as well as Safran documents containing information about billing and the cost of various company projects.

The computer break-ins took place during the first eight months of 2010 and may have involved help from company insiders, Le Monde reported it was told by an unnamed judicial source.

French magistrates in Nanterre have been following up on the preliminary information unearthed by the domestic intelligence services (DCRI), the newspaper said.

While the Safran spokeswoman contacted by Reuters declined to comment, Le Monde said it had contacted the firm and been told: All we know of is a minor case in 2009 that concerned Turbomeca.

Turbomeca says on its website it is the leading helicopter engine supplier in China, with one in two helicopters there equipped with a Turbomeca engine or licensed product.

It also says it co-operates with Chinese firms Harbin Aircraft Industries Group, Changhe Aircraft Industry Group and the helicopter-making divisions of China's Aviation Industry Corp, the state-owned aircraft maker.

Safran is roughly 30-percent owned by the French state, which is still smarting after another case of supposed espionage at carmaker Renault that turned out to be a case of fraud.

Suspicions of industrial espionage at Renault -- which also involved a suspected Chinese link in the early days -- were deflated last month when the case turned out to be one of fraud and Renault executives apologized to three executives it had fired.

(Reporting by Brian Love and Cyril Altmeyer; Editing by Sophie Hares)

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