French officials are gearing up to seize Ruth Madoff's chateau in France, something a special U.S. trustee said shows the urgent need for his office to quickly take control of her swindler husband's businesses.

News that the French are going after the Madoff home in Cap d'Antibes came Monday during a contentious hearing in federal court in Manhattan in which an attorney for trustee Irving Picard and representatives of the U.S. attorney's office locked horns over control of Bernard Madoff's London office.

The hearing made public a substantial dispute festering between Picard's office and prosecutors - reported by Newsday Sunday - over effective control of the London operation, believed to have been a key part in Madoff's estimated $65- billion Ponzi scheme.

Picard's job is to find customer funds, while prosecutors said they want to forfeit Madoff assets and then try to use them to reimburse investors. Madoff has said in court papers he and his wife have about $823 million in assets, $700 million of which is the value of his companies. Prosecutors have said they intend to seize the Madoffs' assets.

David Sheehan, the attorney representing Picard, argued to Judge Louis Stanton that the trustee should be given power of attorney over Madoff's London business. But assistant U.S. attorneys Sharon Frase and Barbara Ward, worried about potential legal complications, want Stanton to keep the Madoff stock for the business in escrow.  

During Monday's hearing, Sheehan told Stanton that Picard, who has been recognized by British courts, knew about moves by French authorities to seize Madoff's home, which the swindler valued at about $1 million. Sheehan also said there is a lawsuit in Gibraltar in which Picard is getting involved concerning $75 million in investor funds. "Things are moving very quick in this area," Sheehan said.  

If the stock power of attorney is transferred to Picard, the trustee would be "poised and ready" to collect investor funds at a time when British courts and U.S. prosecutors also want to seize assets.  

"We are presently, I like to think, the honest broker," said Sheehan, referring to Picard, who is empowered under the Securities Investor Protection Corp. to find customer funds.  

Frase told Stanton that prosecutors were still unclear about the possible legal ramifications of giving the stock in the London office to Picard. When Stanton pressed the government attorneys about whether they thought Picard had mishandled things, Ward said Picard hasn't explained why he needs the power of attorney.  

Stanton reserved decision.