A teenager suspected of killing his parents and setting their home on fire was arrested at the weekend, plunging a village in southeastern France into a state of shock.

A 15-year-old, named only as Valentin, was arrested on Saturday after two bodies were discovered in the family's burnt-out house in Chateauvilain, a village of nearly 800 people between Lyon and Grenoble.

The teenager has admitted to killing his parents, according to the public prosecutor's office.

"I can confirm that young Valentin has confessed to the gendarmes that he had killed his parents," Grenoble public prosecutor Eric Vaillant said on Sunday.

The old farmhouse where the family had lived was set on fire in late November. The adolescent disappeared afterwards.

He was tracked down and arrested in the southern French city of Montpellier on Saturday and taken into custody.

Investigators said that two "almost entirely charred" bodies had been found in the remains of the house.

The corpses bore "gunshot wounds to the skull" and one also had chest wounds.

Forensic tests were still being carried out to identify the victims.

"This is a horrible tragedy. I'm stunned," local mayor Daniel Gaude told AFP.

The teenager, like his mother, had health problems linked to Lyme disease, according to the mayor.

Valentin's engineer father was 58. His 52-year-old mother worked from home. His 17-year-old brother was not at home at the time of the tragedy.

"It's just awful. There are no words," said Bruno Oliva, 60. "Everyone in the village is talking about it."

"They were discreet people. The young man didn't go to school anymore. He was isolated", Oliva told AFP.