The news will disappoint those back in France hoping for a quick dismissal so the leading French politician might return in time to run as the Socialist Party candidate against President Nicolas Sarkozy in 2012. A second attempted rape allegation back in France also threatens to scupper those hopes.
The New York case against Strauss-Kahn suffered a potentially fatal blow last Friday when the prosecution cast grave doubt on the credibility of the hotel maid who accuses him of assaulting and attempting to rape her on May 14.
A meeting was called Wednesday in which the defense and the prosecution were expected to discuss whether the case should be dismissed -- as prosecutors have demanded -- or if a plea deal is possible.
Leaving the office of Manhattan district attorney Cyrus Vance, Strauss-Kahn's lawyer Benjamin Brafman said: "We had a constructive meeting. That's all I'm going to say."
A spokesperson from Vance's office told AFP on the phone after the conclusion of the meeting: "The investigation is continuing."
In the latest twist to the stunning case, the maid's lawyer Kenneth Thompson sent a letter Wednesday to Vance requesting he immediately recuse himself from the case and allow the appointment of a special prosecutor.
Most of Thompson's four-page letter detailed alleged leaks from Vance's office, in particular regarding a New York Times story about a conversation the maid had with a jailed felon that was being secretly recorded.
Among "several other orchestrated leaks and false accounts," Thompson said he was truly saddened that a "senior prosecutor" had refused to deny a New York Post tabloid story accusing the maid of being a prostitute.
"The fact that apparently a prosecutor in your office suggested that it might be true that the victim is a prostitute and had engaged in acts of prostitution while under the protection of your office is appalling."
Thompson also mentioned a "potential conflict of interest" because the head of the prosecutor's trial division is married to one of Strauss-Kahn's lawyers involved in the case.
"We should have been told about this matter by members of your office and not by members of the press," he wrote.
Thompson also complained that one of the prosecutors had "screamed at and disrespected the victim" and yet was still assigned to the case.
Thompson had already said after Friday's hearing that he felt the prosecution was laying the groundwork to dismiss the case and accused Vance of not having the courage to go through with it.
Strauss-Kahn was released from house arrest after a dramatic court hearing on Friday at which prosecutors admitted the credibility of the 32-year-old Guinean-born maid had been shattered.
They said she had given false information on tax and asylum application forms, including about an alleged gang rape in Guinea. Perhaps even more damaging, she had lied in sworn testimony about the Strauss-Kahn case.
The maid initially told the grand jury, which decided back in May that the case could proceed, that she had left Strauss-Kahn's room after the alleged sexual assault and waited in a hallway until he had gone.
Prosecutors revealed Friday that she later recanted that version of events, saying she went on to clean another room and even returned to Strauss-Kahn's room to clean it before telling a supervisor about the alleged incident.
Strauss-Kahn's defense team indicated last week that they would be unwilling to agree to a plea deal over a lesser felony or misdemeanor charge unless the prosecution could find some damning evidence of wrongdoing.
The prosecution insisted Friday that the case had not been dismissed and that the charges stood, promising to carry on their investigations until the truth emerged.
The maid's lawyer, Kenneth Thompson, said she had not changed one word of her account and proceeded to provide the most graphic account to date of the alleged crime, accusing Strauss-Kahn of a brutal sexual assault.
Strauss-Kahn, who is due back in court for another hearing on July 18, has enjoyed a great deal more freedom since being released from house arrest.
In a huge turnaround for someone who weeks ago was on suicide watch in New York's notorious Rikers Island jail, he dined out on truffles and fine Italian food with his wife Anne Sinclair on Friday at an exclusive Manhattan eatery.
Shorn of his ankle monitoring bracelet and without the 24/7 armed guards that had been conditions of his previously draconian $6 million bail and bond deal, the former IMF chief has been moving around at ease.
On Wednesday, while the latest machinations in the case were playing out across town, Strauss-Kahn was again spotted out and about in Manhattan, entering an office building on Broadway.
Meanwhile, back in France, prosecutors said they had received a complaint from a young writer alleging that the former IMF boss and leading politician tried to rape her in 2003.
When the 62-year-old Socialist returns to France he could face a second case if prosecutors take up Tristane Banon's complaint that he grappled with her and tried to strip her in a Paris apartment during an interview.
Strauss-Kahn has dismissed the alleged attack as "imaginary" and his lawyers are planning to sue Banon for defamation over the allegation, which she first made on television in 2007.
Some of Strauss-Kahn's allies in the French opposition Socialist Party have suggested he could return to fight Nicolas Sarkozy in next year's presidential election.
Before the New York scandal he polled as the person most likely to beat Sarkozy.