* Aide accused of conflict of interest due drugs firm work
* Further blow for Hollande weeks from European elections
* Hollande says wont run in 2017 if unemployment not down (Adds Hollande says will not run for re-election if unemployment does not fall)
By Julien Ponthus and Nicholas Vinocur
CLERMONT-FERRAND, France, April 18 (Reuters) - A senior adviser to French President Francois Hollande quit on Friday over accusations of past conflict of interest linked to his work for pharmaceutical firms, adding to pressure on the unpopular Socialist leader weeks before European elections.
Aquilino Morelle, Hollande's chief communications adviser, speechwriter and a main political strategist, has denied investigative website Mediapart's report that he had failed to obtain clearance for lobbying work when he was an employee of the public health inspectorate.
The furore deals another blow to Hollande after heavy losses for his party in town hall elections at the end of March.
Hollande, speaking during a visit to Clermont Ferrand in central France, said his aide had "taken the only option open to him".
With a jobless rate above 10 percent, Hollande's approval score is the lowest of any French leader in the last 50 years and polls suggest he could lose badly to conservatives and the far-right National Front in May's European Parliament election.
Later on Friday, Hollande said he would not run for re-election if unemployment does not fall by the end of his term.
"If unemployment does not fall between now and 2017, I will have neither any reason to be a candidate, nor any chance of re-election," he said at a dinner for trade unionists.
Hollande also faces mounting tension within his party over a 50 billion-euro package of budget cuts designed to help Paris meets its EU commitment to shrink France's public sector debt.
The latest scandal further undermines Hollande's 2012 campaign pledge to run an "exemplary Republic", already hurt when his former budget minister, Jerome Cahuzac, resigned over revelations that he had secret bank accounts in Switzerland.
"This is going to be a profound disappointment for left-wing voters," said Dominique Wolton, a political scientist at the CNRS public research institute. "You cannot ask an entire country to make enormous savings while showing a different image at the highest level of government."
Morelle, 51, said in a Facebook post on Thursday that he had obtained authorisation from the IGAS public health inspection body in 2007 for outside work with Danish pharmaceutical company Lundbeck , for which Medipart said he had earned 12,500 euros ($17,300).
However, IGAS said in a statement it had no record of authorising collaboration with drugs firms in recent years.
Mediapart said Morelle, while at IGAS, had "worked in secret for pharmaceutical laboratories", including arranging meetings between Lundbeck and people involved in pricing drugs in France.
The report did not suggest he had broken any laws and Morelle wrote in his resignation letter to Hollande that he would seek to defend himself against the accusations.
Details of the report are likely to embarrass Hollande's Socialists.
Mediapart said Morelle had led a high-flying lifestyle at taxpayers' expense, including using Elysee Palace chauffeurs for personal errands, ordering excessive amounts of fine wines from the palace cellar, having his office redecorated several times and having a shoe-shine man visit his office.
Morelle wrote on Facebook that due to his workload he had at times asked drivers to fetch his children from school, without responding to the other issues.
The HATVP, a recently created watchdog in charge of ensuring transparency in public life, said it would open an investigation into Morelle's public declaration of interests and assets. ($1 = 0.7228 Euros) (Reporting by Julien Ponthus and Chine Labbe; Writing by Nick Vinocur and Andrew Callus; Editing by Brian Love and Robin Pomeroy)