UPDATE 1-Probe under way in alleged French CO2 VAT fraud

* Noone under official investigation yet-prosecutor's office

* BlueNext unaware of an investigation related to exchange

* BlueNext reiterates no evidence of fraud on exchange

(Adds BlueNext reaction, background)

PARIS/LONDON, June 11 (Reuters) - The Paris prosecutor's office confirmed on Thursday a probe was under way into a suspected multi-million euros value-added tax (VAT) fraud in the French carbon emissions market.

"An inquiry is under way but we are not yet about to place people under official investigation," a source at the Paris prosecutor's office said.

The French Budget Ministry has made carbon permits exempt from VAT in order to prevent a potential scam linked to a French emissions exchange, a government source said on Monday.

A ministry source said there had been no evidence of a VAT fraud despite rumours circulating that a recent surge in volumes in the European Union emissions permits traded over BlueNext, Europe's main exchange for spot permit trading, was suspicious.

Through carousel fraud, also called missing trader fraud, fraudsters import goods VAT-free from other countries, and then sell the goods to domestic buyers, charging them VAT. The sellers then disappear without paying the collected tax to the government collection authorities.

A BlueNext spokesman told Reuters on Thursday there was no evidence VAT fraud was occurring over its exchange and that the rumours were "unsubstantiated", adding he was unaware of any investigation relating specifically to the exchange.

He said he had not been contacted by any authorities, including the Paris prosecutor's office, about the matter.

BlueNext, a joint venture between NYSE Euronext (NYX.PA) and Caisse des Depots, halted spot trading on Monday.

Last Thursday and Friday, the French national emissions registry was closed for what it called "technical reasons."

BlueNext resumed trade on Wednesday, with the spot contracts exempt from France's 19.6 percent VAT.

Some 2.5 million carbon credits were traded on Wednesday versus a record 20 million credits traded on June 2 and a daily average of 9.4 million in the past 4 weeks.

The exchange had traded just over 800,000 credits by 1100 GMT on Thursday. (Reporting by Muriel Boselli in Paris and Michael Szabo in London; editing by James Jukwey)