Lerab Ling Temple, France, 22 August 2008 (By Estele Shirbon, Reuters) - The Dalai Lama inaugurated a Buddhist temple in southern France on Friday with French first lady Carla Bruni-Sarkozy among the guests.

The ceremony at the Lerab Ling temple, set in remote green hills in the Herault area and built according to traditional Tibetan design, came at the end of a visit to France during which the Dalai Lama repeatedly criticised Olympics host China.

His presence in France during the Games caused a headache for President Nicolas Sarkozy, who has been widely criticised for declining to meet the exiled Tibetan leader. The tacit aim of his wife's presence on Friday was to appease the row.

The red and gold Lerab Ling is one of the biggest Tibetan Buddhist temples in the West. It houses a 7-metre (23-foot) high golden statue of Buddha and many holy relics and scriptures. Another golden Buddha sits in the middle of a lake outside.

It was raining heavily on Friday but that did not stop hundreds of students of Buddhism from coming to the site, which was decorated with multi-coloured Tibetan prayer flags. They sheltered under orange umbrellas on the grass.

The Dalai Lama led a procession of monks in orange and red, chanting and playing long trumpets, around the temple, accompanied by Bruni-Sarkozy looking glamorous in a dark blue knee-length dress. When they arrived at the door, the Dalai Lama gave her a khata, a long white scarf symbolising welcome.

The Buddhist pageantry was a departure for former model Bruni-Sarkozy, who has recently appeared on the covers of glossy celebrity magazines promoting her latest pop album.

The Dalai Lama's two-week visit to France was mostly focused on lectures about Buddhism, but he also seized the opportunity to express fears and grievances about Chinese policies in Tibet.

His comments are sensitive at a time when China is hosting a $43 billion (23 billion pounds) Olympic Games partly aimed at impressing the rest of the world with its newfound status as a major power.

The question of Tibet, which China invaded in 1949 and considers an integral part of its territory, came to the fore in March when protests there were put down by Chinese forces.

Beijing was widely criticised for its actions in Tibet and came under pressure to engage in dialogue with the Dalai Lama.

Two series of talks between Chinese authorities and envoys from the Buddhist leader have taken place since then but he says they have yielded little progress.

Sarkozy's response to these developments has drawn criticism from pro-Tibet campaigners but also caused tension with Beijing.

He said he would only go to the opening ceremony of the Games if China talked to the Dalai Lama. This irritated Beijing, but it also left the pro-Tibet camp disappointed when he finally announced he would indeed go days before the ceremony.

Just after his announcement, the Chinese ambassador to France warned that there would be "serious consequences" if Sarkozy met the Dalai Lama. Sarkozy responded sharply that it was not for China to determine his agenda.

Eventually he declined to meet the Dalai Lama and again this disappointed advocates of Tibet who said he had caved in to pressure from China. Bruni-Sarkozy's presence at Lerab Ling on Friday, while drawing a huge media circus, is unlikely to put the issue to rest as she has no official role in the government.

(Editing by Mariam Karouny)