The sexual assault case against the former head of International Monetary Fund (IMF) Dominique Strauss-Kahn is on the verge of collapse as investigators doubt the credibility of the accuser, a report said Thursday.

The investigators have uncovered major "gaps" in the credibility of the female housekeeper who accused Strauss-Kahn of attacking her in his Manhattan hotel suite in New York in May, The New York Times website quoted two well-placed law enforcement officials as saying.

Despite the evidence of a sexual encounter between Strauss-Kahn and the woman, prosecutors do not believe much of what she told them. One of the law enforcement officials said that the 32-year-old accuser has repeatedly lied to them during the investigation, according to the report.

Prosecutors provided their latest findings to lawyers for Strauss-Kahn on Thursday and discussed whether to dismiss the felony charges. Among the discoveries, the housekeeper, a Guinean who arrived in the United States in 2002, was suspected to be possibly linked to criminal activities, including drug dealing, money laundering and fraud in asylum application, the report added.

Meanwhile, according to a recorded phone conversation, the woman called an incarcerated man within a day of her encounter with Strauss-Kahn to discuss the possible benefits of pursuing the charges against the French politician. The man had been arrested on charges of drug dealing and money laundering that also involves the woman.

Lawyers for Strauss-Kahn and the prosecutors will return to State Supreme Court in Manhattan on Friday, as the judge is expected to consider easing the extraordinary bail condition imposed on Strauss-Kahn, the report said.

Strauss-Kahn was required to post 1-million-U.S. dollar bail and a 5-million-dollar bond in the wake of the housekeeper's accusations. He has remained under 24-hour home confinement while wearing an ankle monitor.

The revelations mark a stunning change of fortune for Strauss-Kahn, who was considered as a leading candidate for the French presidency before the sexual assault case emerged and made international headlines last month, leading to his resignation as the IMF's managing director.

On Tuesday, French Finance Minister Christine Lagarde was chosen by the IMF Executive Board as Strauss-Kahn's successor, becoming the first woman to take the IMF's top job since its inception in 1944.