BBC NEWS | Middle East | France warning of war with Iran
Mr Kouchner has sounded the alarm over Iran's nuclear programme
"We have to prepare for the worst, and the worst is war," Mr Kouchner said in an interview on French TV and radio.
Mr Kouchner said negotiations with Iran should continue "right to the end", but an Iranian nuclear weapon would pose "a real danger for the whole world".
Iran has consistently denied it is trying to acquire nuclear weapons but intends to carry on enriching uranium.
Mr Kouchner also said a number of large French companies had been asked not to tender for business in Iran.
"We are not banning French companies from submitting. We have advised them not to. These are private companies."
"But I think that it has been heard and we are not the only ones to have done this."
He said France wanted the European Union to prepare sanctions against Iran.
"We have decided that while negotiations are continuing to prepare eventual sanctions outside the ambit of UN sanctions. Our good friends, the Germans, suggested that," he said.
Until now the Security Council of the United Nations has imposed economic sanctions on Iran, but did not allow for military action.
The United States has not ruled out a military attack against Iran to prevent it from acquiring a nuclear weapon.