The suspect in the beheading of a businessman that French authorities are calling a terrorist attack took a "selfie" photo with the slain victim, officials have said.

Sources close to the investigation said on Saturday that the suspect, Yassin Salhi, a 35-year-old married father-of-three sent a picture of him with the severed head via the WhatsApp messaging service.

The message was sent to a Canadian number but investigators said they were still working to determine the final recipient, as the number used could be a relay.

Authorities are questioning Salhi about Friday's attack, during which he also drove his van into a warehouse packed with dangerous gases in an apparent bid to blow up the factory and himself.

The prosecutor in the case said firefighters overpowered Salhi as he was trying to open acetone bottles in what is believed to have been an attempt to cause a larger explosion at the US-owned Air Products factory in Saint-Quentin-Fallavier, some 40km from Lyon.

The firefighters then discovered the decapitated body of his 54-year-old employer Herve Cornara - who ran a delivery firm - near the car, along with a knife.

Cornara's head was pinned to a nearby fence.

"The head was surrounded by two Islamic flags bearing the Shahada, the profession of [the Muslim] faith," said prosecutor Francois Molins.

Autopsy results

No group has claimed Friday's attack, which came on the same day as a massacre at a Tunisian beach resort in which 38 people were gunned down and a suicide bombing in Kuwait that killed 26.

The other two attacks have been claimed by the Islamic State of Iraq and the Levant group.

The first results of the autopsy on the victim did not provide the exact cause of death, nor whether Cornara was already dead before he was beheaded.

Meanwhile, in the town of Saint-Quentin-Fallavier, shocked residents held a minute's silence, followed by a pulsating rendition of France's national anthem.

The gory attack in France came nearly six months after a three-day killing spree in Paris left 17 people dead, most of them gunned down in the offices of satirical magazine Charlie Hebdo.

Like the Charlie Hebdo attackers and Mohamed Merah who gunned down soldiers and Jewish children in the southwest city of Toulouse in 2012, Salhi had been known to security services for "radicalisation", but slipped through the cracks.

Interior Minister Bernard Cazeneuve said on Friday that Salhi had been investigated for links to radical Salafists in Lyon, but was not identified as having participated in terrorist activities and did not have a criminal record.

France is on high alert over hundreds of citizens who have gone to fight in Iraq and Syria, as well as those involved in recruitment or radicalisation online.

Source: AFP