Lebanese businessman Ziad Takieddine has confessed to having paid illegal kick-backs to fund the presidential campaign of former French prime minister Edouard Balladur.

It is alleged that kick-backs on an arms deals with Saudi Arabia and Pakistan between 1993 and 1995 helped fund the failed presidential campaign of Mr Balladur in 1995, while former French President Nicolas Sarkozy was Budget Minister and Mr Balladur’s campaign spokesperson.

Mr Takieddine, who is accused of being the middleman, told investigating magistrates he gave kick-backs to one of Mr Sarkozy’s close aides, Thierry Gaubert.

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According to Le Monde, Mr Takieddine said Mr Gaubert collected suitcases filled with banknotes during visits to Geneva in 1994. Mr Gaubert, and another Sarkozy associate who ran Mr Balladur’s campaign, Nicolas Bazire, were both placed under investigation in 2011 for their alleged role in the scandal. Both Mr Bazire and Mr Gaubert deny they are directly connected.

Mr Sarkozy is not directly implicated and has denied any role.