Google Inc will cooperate fully with U.S. antitrust regulators but will not let the formal probe launched last month distract or disrupt its strategy, executive chairman Eric Schmidt said.

Schmidt, who vacated his CEO seat to co-founder Larry Page in April and now oversees government affairs, also said Google executives -- though not he himself -- had discussed the recent hacking of email accounts with Chinese officials.

Google last month revealed a major hacker attack that it said originated within China. It said hackers tried to steal the passwords of hundreds of Google email account-holders, including those of senior government officials, Chinese activists and journalists.

We tell the Chinese what we know ... and then they publicly deny their role. That's all I have to say about that, Schmidt told reporters and media industry executives at the Allen & Co conference in Sun Valley, Idaho.

Closer to home, the U.S. Federal Trade Commission has started a formal review of Google's business, raising concerns among investors about a lengthy, distracting probe and potential legal action.

The FTC is expected to address complaints from Google's rivals that its search results favor the company's own services. Google, which runs an estimated 69 percent of Web searches worldwide, can make or break a company depending on its search ranking.

Some worry that Google's desire to stand firm against government intrusion -- as with its protests against Chinese censorship of search results -- will trigger a long battle that ultimately does more damage than a quick settlement.

We've had some meetings internally, (but) we haven't changed anything, Schmidt said.

(Reporting by Sarah McBride; Editing by Gary Hill)