Former French president Nicolas Sarkozy was charged last night with corruption offences over £42million of payments from Colonel Gaddafi.

Sarkozy, 63, is facing a criminal trial and could be jailed over the donations, which are believed to have been laundered through bank accounts in Panama and Switzerland. He was interrogated in Paris, about his links to the late Libyan dictator, who is said to have provided the cash to propel Sarkozy to power in 2007.

After returning home to his third wife, former supermodel and pop singer Carla Bruni, he was charged with passive bribery, illegal campaign financing and receiving £4.35million of Libyan public funds. All of the offences are punishable with jail time. Sarkozy denies any wrongdoing.

A dishevelled Nicolas Sarkozy (pictured this morning in Paris) has set off for a second day of questioning over claims his 2007 election campaign had received funds from Libyan leader Colonel Gaddafi

Gaddafi's son, Saif Al-Islam Gaddafi said he is able to prove Sarkozy was backed by illicit Libyan cash.

The former president underwent two days of questioning before he was charged over allegations he received £42million in illegal payments from Gaddafi to fund his 2007 election campaign.

According the Middle East Monitor, Gaddafi said a former director of the Libyan intelligence services has a recording of the first meeting between Sarkozy and his father.

He added that he himself witnessed the delivery of the first portion of the money to Sarkozy's former chief of staff, Claude Guant, in Tripoli.

Earlier today, Gaddafi announced that he will be running for president in the Libyan elections later this year.

Sarkozy, president from 2007 to 2012, was seen leaving his home in Paris with his lawyer this morning, just hours after he was driven away from a police station in Nanterre at midnight.

In 2012 it was rumored that the man who shot Gaddafi after he was captured by Libyan rebels a year earlier was a French secret service agent acting on express orders handed down by Sarkozy.

The man was said to have infiltrated a violent mob mutilating the captured Libyan dictator last year and shot him in the head.

The motive, according to well-placed sources in the North African country, was to stop Gaddafi being interrogated about his links with Sarkozy.

Meanwhile, the man who blew the whistle on the alleged multi-million euro payments - the uncle of human rights lawyer Amal Clooney - has defended his decision to turn supergrass.

Former arms dealer Ziad Takieddine, 68, who is known to be close to Mrs Clooney, the 40-year old wife of Hollywood star George, said: 'Gaddafi is not guilty, it's Sarkozy who is guilty.'

Whistleblower: Ziad Takieddine, 68, the uncle of human rights lawyer Amal Clooney, right, has defended his decision to turn supergrass, saying Sarkozy is 'guilty'.

He was seen leaving his home in Paris (pictured) with his lawyer in a car and entering offices of investigators who placed him in custody yesterday

Mr Takieddine told l'Orient-Le Jour (The Daily Orient) – Lebanon's leading French language newspaper – that his decision to go to police was not 'revenge' but 'an act that was expected'.

Mr Takieddine, who is French-Lebanese, claims to have been the 'official mediator' between Sarkozy and the Libyan regime from 2004, and took pride in working 'in the shadows'.

'I went to Libya for the first time at the request of Nicolas Sarkozy in late 2004, early 2005 to open a new page with France,' said Mr Takieddine.

Neither Sarkozy nor his lawyers have commented publicly about the latest development in an inquiry that began five years ago. But he has in the past called the allegations 'grotesque' and a 'manipulation'.

Sarkozy is said to have received the kickbacks in 2007, during the presidential election campaign that swept him to power for a single five-year term.

Neither Sarkozy nor his lawyers have commented publicly about the latest development in an inquiry that began five years ago. But the 63-year-old has in the past called the allegations 'grotesque' and a 'manipulation'

Sarkozy, president from 2007 to 2012, attended the judicial police headquarters in the suburb of Nanterre yesterday. His car his seen leaving the building last night

Former French president Nicolas Sarkozy returned to police custody on Wednesday for a second day of questioning over allegations the late Libyan dictator Muammar Gaddafi financed his 2007 election campaign . The pair are pictured at Elysee Palace in Paris in 2007

French law bans candidates from receiving cash payments above £6,300, but the massive donation is said to have been laundered through bank accounts in Panama and Switzerland.

Sarkozy is now under huge pressure to explain himself in the light of what his opponents called compelling evidence, and faces corruption charges over the next 48 hours.

A document made public in Paris is said to show that the French leader and the former Libyan dictator made an illegal financial deal.

Written in Arabic and signed by Mussa Kussa, Gaddafi's intelligence chief, in 2006, it refers to an 'agreement in principle to support the campaign for the candidate for the presidential elections, Nicolas Sarkozy, for a sum equivalent to €50million'.

A bundle of incriminating evidence was originally leaked by senior members of Libya's National Transitional Council to French investigative news site Mediapart.

A governmental briefing note among papers sent to Mediapart points to numerous visits to Libya by Sarkozy and his colleagues which were aimed at securing funding.

One, said to have taken place on October 6, 2005, led to 'campaign finance to NS' being 'all paid' - assumed to be a reference to Sarkozy.

The 63-year-old (not shown) was held by judicial police in Paris and taken to their headquarters (pictured) in the suburb of Nanterre

Sarkozy is said to have received the kickbacks in 2007, during the presidential election campaign that swept him to power for a single five-year term

At the time, Sarkozy was an ambitious interior minister who was raising money for his presidential election campaign.

Mediapart claims that the €50million referred to in the note was laundered through accounts including a Swiss one opened in the name of the sister of Jean-Francois Cope, the leader of Sarkozy's UMP party, who are now called the Republicans.

The money was then allegedly distributed through an arms dealer called Ziad Takieddine, who was acting as a middle man between Arab despots and French politicians.

The news follows claims last year by Gaddafi's son, Saif-Al Islam Gaddafi, that Libya had financed Sarkozy's election.

Saif-Al Islam, who is now being held in Libya following the toppling of his father's regime, said: 'Sarkozy must first give back the money he took from Libya to finance his electoral campaign. We funded it.'

Eyebrows were first raised when Gaddafi was honoured with a state visit to Paris in late 2007.

Eyebrows were first raised when Gaddafi was honoured with a state visit to Paris in late 2007. They are pictured at the Elysee Palace in December of that year

He was referred to as the 'Brother Leader' by the French president, and allowed to pitch his tent next to the Elysee Palace.

The apparently incriminating evidence - which will now be passed to French police - emerged through an investigation into Takieddine's activities. The arms dealer's doctor, Didier Grosskopf, says he witnessed negotiations about funding.

As France's head of state, Sarkozy could not be prosecuted while in office, but fraud squad officers raided his Paris home within days of him losing the 2012 presidential elections.

Sarkozy turned on his friend Gaddafi at the beginning of the Arab Spring in 2011.

French jets were the first to attack Gaddafi's tanks in a brutal military campaign which ended with the Libyan leader being murdered.

Since losing the election in 2012 to his socialist rival Francois Hollande, Mr Sarkozy has been living in Paris with this third wife, former supermodel and pop singer Carla Bruni, 50.

He has tried to make comebacks to power, but all have failed.

A judicial source in Nanterre said: 'Mr Sarkozy can be held in custody for up to 48 hours. His period in custody started on Tuesday morning.'