Party leader Marine Le Pen told AFP that without the money her party, formerly known as the National Front, would no longer be able to operate and “will be dead by the end of August”.
She and other party members are accused of using funds earmarked for parliamentary assistants to pay for France-based staff over several years starting in 2009.
Investigating judges ordered the seizure of the funds, nearly half the total 4.5 million euros ($5.3 million) allocated for the party this year, on June 28, a source close the inquiry said.
Such subsidies are common in European countries, which see them as a way of ensuring a level playing field while limiting the risks of political corruption or illegal funding.
But despite the public funds, Le Pen's party has had a string of financial setbacks.
In 2014 the party had to take a nine million euro loan from a Russian bank as it struggled to secure financing in France, and several banks including Societe Generale and HSBC refused to open accounts for the party last year.
The European Parliament is demanding seven million euros in assistant subsidies it believes was fraudulently paid by Le Pen and other National Rally lawmakers, including her father and party founder Jean-Marie Le Pen.
Ten people have been charged in the inquiry so far, including Marine Le Pen.