French judges have decided to press ahead with the prosecution of Dominique Strauss-Kahn for pimping.
Lawyers for the former International Monetary Fund chief said they would appeal against the decision.
DSK has admitted attending sex parties in northern France, but says he did not know that some of the women present were paid prostitutes.
Last week he reached a settlement with a hotel maid who said he had raped her.
DSK had been accused of trying to rape Nafissatou Diallo in a hotel in New York in May 2011.
The civil case was settled for an undisclosed sum. A criminal investigation was dropped by US prosecutors last year.
On Wednesday, a court in the northern French town of Douai rejected a request by Dominique Strauss-Kahn’s lawyers to drop the inquiry into pimping.
The decision removes the prospect of a quick conclusion to the last inquiry DSK faces.
The case is the last major inquiry DSK faces, and the ruling Wednesday’s ruling removes any prospect of a quick conclusion.
Dominique Strauss-Kahn’s defence lawyers accuse the investigating judges in the case of being biased.
“Dominque Strauss-Kahn’s defence team is certain that he will ultimately be cleared of these absurd accusations of pimping,” lawyer Henri Leclerc said in a statement.
The lawyer added that he planned to take the matter to the supreme court.
The inquiry is known as the Carlton affair – after the name of the hotel in Lille in which the alleged orgies took place.
Consorting with prostitutes is not against the law in France, and DSK has acknowledged that he was at some of the parties with the women.
But DSK’s legal team says he had no idea they were prostitutes, and that there is no evidence to support a formal charge of pimping.
“I challenge you to distinguish a naked prostitute from any other naked woman,” his lawyer has said in his defence.
His lawyers have also argued that the investigation should be annulled due to insufficient grounds.
Dominique Strauss-Kahn, who is reportedly taking steps to reinvent himself as a highly paid consultant and conference speaker, has said the authorities are trying to “criminalize lust”.
Other cases against him have already been dropped.
In October, French prosecutors ended an investigation into allegations of “gang rape” at a hotel in Washington after the woman who made the claim retracted her evidence.
Magistrates also dropped a sexual assault case brought by French author Tristane Banon on the grounds that the alleged 2003 incident had taken place too long ago.