A government spokesman said Jean-Pierre Jouyet "is Secretary General at the Elysee. He is staying."
Hollande's right-hand man, the 60-year-old Jouyet has a foot in both main political camps in France having also served as a junior minister in Sarkozy's centre-right government.
The long-time friend of the Socialist president has come under pressure to resign after becoming embroiled in a media scandal involving Sarkozy and his former prime minister, Francois Fillon.
According to a report in Le Monde daily, Jouyet told journalists about a lunch he had with Fillon earlier this year during which the former PM allegedly urged him to "quickly hit" Sarkozy over a campaign funding scandal.
Jouyet initially denied discussing Sarkozy's legal troubles at the lunch, then changed his story a few days later.
But Environment Minister Segolene Royal also rode to Jouyet's rescue saying: "I think we need to move on to other topics."
"The French people are a bit surprised at the time we spend on incomprehensible and violent polemic," added the minister.
Fillon is taking legal action to ensure that a full copy of a tape of Jouyet's interview with the two Le Monde journalists is made public.
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