Liliane Bettencourt

Dec 6 (AFP) - Billionaire L'Oreal heiress Liliane Bettencourt has reconciled with her daughter Francoise Bettencourt-Meyers, they announced Monday, ending a legal wrangle that endangered France's biggest fortune.

Bettencourt-Meyers had been seeking to have her 88-year-old mother declared mentally unfit to manage the estimated 17-billion-euro fortune and had sued a society photographer, accusing him of exploiting his ties to the family.

But on Monday the feuding relatives issued a joint statement which said they had come to a "private agreement" to end all ongoing court cases.

"The decision that Francoise and I have taken offers me hope. It meets my wish to see the family united. We can now embrace the future together," the elderly shampoo and cosmetics heiress said, according to the statement.

In the same statement, the daughter Bettencourt-Myers added: "This agreement allows us at last to bring back the family peace shared as much by my husband and my children as by my mother.

"I was also longing for such an end for the entire L'Oreal Company that is carrying on its fabulous story and that is so dear to me."

The daughter's lawyer Olivier Metzner told AFP: "Liliane and Francoise, as they had hoped, have reconciled and agreed to put an end to all disputes.

"They are overjoyed to be together again, even if it took three years of judicial disagreements to get to this happy ending," he said, confirming that Francoise had dropped her case against photographer Francois-Marie Banier.

Bettencourt broke with former companion Banier, 25 years her junior, earlier this year, cutting him out of her will and depriving him of an estimated 1.25 billion euros.

The daughter had accused Banier, 63, of exploiting her mother's vulnerability to prise almost a billion euros worth of gifts out of her -- including a private Seychelles island -- and to get himself written into her will.

Bettencourt senior has always insisted she remained mentally capable.

The case has also taken a political twist, after a butler illegally taped Bettencourt talking to her financial manager and leaked a recording to the press which suggested that she had made illegal campaign donations.

Separate investigations have been launched into this side of the scandal, and both President Nicolas Sarkzoy and his former campaign treasurer and labour minister Eric Woerth have been forced to deny wrongdoing.

The investigation into the alleged illegal campaign donation will continue.