PARIS, Oct 17, 2011 (AFP) - L'Oreal heiress Liliane Bettencourt is to be placed under the guardianship of family members, the lawyer of her estranged daughter said Monday after a court hearing.

FRANCE, Paris : Combo of file pictures made on October 17, 2011 in Paris, shows French Billionaire L'Oreal heiress Liliane Bettencourt (R) and her daughter Francoise Bettencourt-Meyers leaving the Institut de France on October 12, 2011. Liliane Bettencourt, 88, is to be placed under the guardianship of family members, the lawyer of her estranged daughter Francoise Bettencourt-Meyers said on October 17, 2011 after a court hearing. AFP PHOTO / FRANCOIS GUILLOT

France's richest woman, whose mental health at age 88 is reportedly declining but who fiercely opposed her family's attempt to take charge of her fortune, will be placed under the guardianship of her eldest grandson, Jean-Victor Meyers, 25.

Lawyer Charlotte Robbe-Phan said her fortune, estimated to be worth over 16 billion euros (20 billion dollars), will be placed under the guardianship of her daughter Francoise Bettencourt-Meyers as well as grandsons Jean-Victor and Nicolas.

Bettencourt is on L'Oreal's board of directors but family members stressed that, as they will be the guardians, the court's decision should have little impact on the running of the cosmetics giant.

L'Oreal declined to comment on the ruling when contacted by AFP.

Bettencourt's lawyer Jean-Rene Farthouat said he would appeal the court's ruling, which remained in place pending the appeal process.

Farthouat criticised the "deeply disappointing decision that I will have to inform Mrs Bettencourt of with difficulty. This decision includes clear legal errors and is contrary to common sense."

The Bettencourt mother and daughter have been at the centre of a very public feud over the fate of France's third-largest family fortune.

The website of newspaper Le Monde on Monday quoted a medical report for use by the court as saying that Bettencourt was suffering from "mixed dementia" and "moderately severe" Alzheimer's disease.

Bettencourt "suffers from cognitive difficulties evidenced by temporal disorientation, memory problems, reasoning difficulties and aphasic elements," Le Monde quoted the report as saying.

The report said Bettencourt "presents with Alzheimer's disease at a moderately severe level with a possible vascular participation" and that she is in the midst of a "slow and progressive process of cerebral degeneration."

Bettencourt-Meyers has argued that her mother is mentally unfit to manage the vast fortune she inherited when her father and L'Oreal founder Eugene Schueller died in 1957.

Bettencourt, whose own mother died when she was five, started as an apprentice at L'Oreal aged 15 and was very close to her father, who came from a modest background before starting the company that originally made hair dye.

In an interview published in Sunday's Journal du Dimanche, Bettencourt threatened to leave France if her daughter managed to place her under her guardianship.

"If it's that, I will go abroad. If my daughter looks after me I would feel stifled. If it's her, I will leave," she said.

Bettencourt-Meyers has alleged that people close to her mother, including celebrity photographer Francois-Marie Banier, took advantage of the heiress.

Banier was Bettencourt's sole named beneficiary in a will drawn up in December 2007. But Bettencourt broke with Banier earlier this year, cutting him out of her will and depriving him of an estimated 1.25 billion euros.

Mother and daughter have been involved in legal battles for three years.by Pauline Talagrand