The sexual assault case against Dominique Strauss-Kahn is reportedly collapsing, with the ex-IMF chief and French presidential hopeful due in a US court on Friday for a surprise hearing.

The prominent French politician resigned from his post at the world's crisis lender to battle charges that he sexually assaulted and attempted to rape a hotel maid in his luxury hotel suite in Manhattan on May 14.

But on Thursday, The New York Times, citing two law enforcement sources close to the sensational case, said that although there was clear evidence a sexual encounter took place, prosecutors did not believe much of the version of events told by the Guinean-born maid and suspect she has repeatedly lied to them.

If confirmed, such doubts could mark a dramatic reversal in the case that has upended politics in France -- where Strauss-Kahn was once seen as a likely presidential candidate -- and prompted a change in leadership at the International Monetary Fund at a time of major upheaval in the eurozone.

Officials said that within a day of the alleged rape attempt, the maid was recorded speaking on the phone with a man jailed for possessing 400 pounds (180 kilograms) of marijuana and discussing the benefits of pursuing charges.

The Times said he is one of several individuals who made multiple cash deposits, totaling around $100,000, into the woman's bank account over the last two years.

It said Friday's unscheduled hearing would likely alter the strict bail conditions imposed on Strauss-Kahn, allowing him to travel freely within the United States, and that lawyers were discussing dismissing the felony charges.

"It is a mess, a mess on both sides," one official told the respected daily, indicating that prosecutors, who met with defense lawyers on Thursday, would tell the judge they "have problems with the case."

The district attorney's office may ask Strauss-Kahn to plead guilty to a misdemeanor, but his lawyers would contest such a move, it added.

Among the discoveries, one official told the newspaper, are issues involving the asylum application of the 32-year-old housekeeper and her possible links to criminal activities, including drug dealing and money laundering.

Officials declined to reveal the reason for Friday's hearing.

"No details about this appearance will be available until the defendant appears in court tomorrow," the Manhattan District Attorney's office said.

The former French finance minister had not been expected back in court until July 18.

Strauss-Kahn had posted $1 million bail and a $5 million bond when he was released in May and agreed to remain under house arrest with an ankle monitor.

Earlier Thursday, French newspaper Liberation, citing Strauss-Kahn's defense lawyers, said he was likely to challenge the legality of the lineup that took place a day after his arrest, when the alleged victim picked him out.

Strauss-Kahn had spent days in New York's tough Rikers Island jail pending the bail agreement, but is now awaiting trial in his luxury rental apartment in Manhattan's TriBeCa neighborhood. He has denied all charges against him.

Strauss-Kahn resigned from the IMF shortly after his arrest, setting off a battle for the leadership of the US-based multilateral lender from which French finance minister Christine Lagarde ultimately emerged victorious.

The Strauss-Kahn affair has sent shock waves through France, where many initially believed he was the victim of a political conspiracy and slammed New York police for forcing him to endure a "perp walk" before the world media.

Word that the case might crumble, however, raised hopes among France's opposition Socialists that a vindicated Strauss-Kahn might return to help them drive President Nicolas Sarkozy from office in next year's elections.

"It's a thunderbolt -- but in the opposite direction this time," said Socialist former prime minister Lionel Jospin.

In a separate article published Wednesday, the Times reported that Lisa Friel, head of the Manhattan district attorney?s sex crimes unit for nearly a decade, was leaving the post.

It was not immediately clear if the move was related to the Strauss-Kahn case. Friel had made an early court appearance as part of the case, but did not remain on the investigating team, the Times said.