She lied about being gang-raped in her home country. She cheated on her taxes. And she changed details of her story about being sexually assaulted by a man once seen as the next president of France.

These were some of the devastating charges laid out by prosecutors about the hotel maid who accuses former IMF chief Dominique Strauss-Kahn of sexual assault.

And perhaps most crucially, she admitted giving false testimony to the grand jury about what happened immediately following the purported attack.

Those inconsistencies, detailed in a letter prosecutors sent to Strauss-Kahn's defense team on Thursday and given to reporters on Friday, have led investigators to lose faith in her credibility as a witness and could undermine their case.

A lawyer for the accuser admitted the woman made some mistakes but insisted she was sexually assaulted by Strauss-Kahn, then a steward of the world economy and the man leading the polls to become the next president of France.

The lawyer, Kenneth Thompson, portrayed the story of a frightened, illiterate woman who followed some bad advice. She was badly bruised and injured in the assault and may need surgery to repair a torn ligament in her shoulder, he said.

Regarding any claim that Strauss-Kahn and the woman had consensual sex, Thompson said: That is a lie.

The victim from Day One described a violent sexual assault. ... She has never once changed a single thing about that account. The District Attorney knows that. That was true the day it happened. That was true today, Thompson told a news conference.

LIES AND MISTAKES

District Attorney Cyrus Vance, the elected chief prosecutor in Manhattan whose political future could hinge on this case, told reporters the case was still active but stopped short of saying the prosecution would continue no matter what.

As prosecutors, our duty is to do what is right in every case without fear and favor wherever that leads, Vance said.

The accuser initially told prosecutors and the grand jury she fled to a hallway after being attacked in Strauss-Kahn's suite and waited for him to leave, and she also told a supervisor what happened shortly after, prosecutors said.

The complainant (accuser) has since admitted that this account was false and that after the incident in Suite 2806, she proceeded to clean a nearby room and then returned to Suite 2806 (Strauss-Kahn's room) and began to clean that suite before she reported the incident to her supervisor, the letter said.

The accuser also admitted she lied about being politically persecuted in her home country of Guinea in order to gain U.S. asylum, cheating on her taxes by claiming an additional child as a dependent and misrepresented her income in order to maintain her present housing, the letter said.

Finally, during the course of this investigation, the complainant was untruthful with assistant district attorneys about a variety of additional topics concerning her history, background, present circumstances and personal relationships.

Lawyer Thompson said the illiterate woman received bad advice that she needed to hype her petition for U.S. asylum.

A victim of female genital mutilation, she did not want the same fate to befall her daughter but did not know that would be enough to qualify for asylum, Thompson said. Instead she told a story of political prosecution.

Moreover, she was forthcoming about her mistakes with prosecutors, Thompson said.

The case against Strauss-Kahn appeared to be near collapse when investigators started losing faith in her credibility.

The victim here may have made some mistakes, but that doesn't mean she's not a rape victim, Thompson said.

In her asylum petition, she told of being gang-raped but now admits the story was fabricated. However, she told prosecutors she was raped in the past in Guinea but under different circumstances than what she described during initial interviews, the letter said.

EARLY QUESTIONS

Right from the start, Strauss-Kahn vehemently denied he had sexually assaulted the hotel maid.

Reuters has learned that people connected with his defense team began collecting evidence within days of his May 14 arrest that raised questions about the 32-year-old Guinean's immigration status, her background and about some of the people she associated with.

Not until Thursday, however, did the issue of her credibility formally come to light, when prosecutors notified the defense that they too had collected information pertaining to her credibility.

Two sources connected with Strauss-Kahn's defense team told Reuters that by late June they had assembled information indicating that the woman was part of a community of criminals involved in such alleged activities as drug and people trafficking, money laundering and counterfeiting official documents and brandname goods.

Early on, investigators close to Strauss-Kahn's defense team also started raising questions about members of the woman's immediate entourage, including a man who at one point claimed to be her spokesman and brother, but was not.

One source close to the case said he believed investigators for both the defense and prosecution several weeks ago had accumulated significant information undermining the accuser's credibility.

In fact, Strauss-Kahn lawyers said in a letter to prosecutors on May 26 We could now release substantial information that in our view would seriously undermine the quality of this prosecution and also gravely undermine the credibility of the complainant in this case.

Two defense sources said, however, that neither prosecutors nor Strauss-Kahn's defense team exchanged information of substance on the woman's background or credibility until Thursday.

In a statement prepared for submission to acting Supreme Court Judge Michael Obus at the bail hearing on Friday, assistant district attorney Joan Illuzzi-Orbon insisted that at the time of Strauss-Kahn's initial release from jail in late May on tough bail restrictions, authorities had already conducted an extensive investigation and collected circumstantial and forensic evidence which strongly suggested something other than a consensual sexual encounter between the maid and Strauss-Kahn.

However, subsequent investigations caused authorities to re-assess their case, the prosecutor said, and in a June 30 letter, the District Attorney's office said it had concerns about the substantial credibility issues relating to the complaining witness.

Justice Obus said on Friday prosecutors were reexamining the case. Charges of sexual assault against Strauss-Kahn meanwhile remain. His next court date is set for July 18.

One of the sources familiar with evidence investigators had turned up weeks ago about the accuser's background said: Just about everything that was reported on this woman early on was untrue but no one checked or wanted to believe anything else.

However, a former senior New York law enforcement official familiar with the Manhattan prosecutor's office said that dramatic twists in high-profile cases are not unheard of, and that the District Attorney's office handled the case with integrity and propriety.

(Reporting by Daniel Trotta and Mark Hosenball; Editing by Stella Dawson and Sandra Maler)