This article is more than 7 years old

This article is more than 7 years old

French prosecutors have opened a judicial investigation into allegations that Nicolas Sarkozy's successful 2007 election campaign received illicit funding from the Libyan leader Muammar Gaddafi.

The inquiry does not name anyone as a suspect, and centres on claims of corruption, influence trafficking, forgery, abuse of public funds and money-laundering.

It is based on allegations by a Franco-Lebanese businessman, Ziad Takieddine, who, during questioning by officials in December, said he had proof that Sarkozy's successful campaign was illegally funded by the Libyan regime between 2006 and 2007. Takieddine said the funding amounted to at least €50m (£35m).

He claimed Claude Guéant, who went on to become Sarkozy's chief-of-staff at the Elysée and later interior minister, had given a key figure in the Libyan regime bank account details for money transfers. Guéant has dismissed the claims as "absolutely ridiculous" and is suing Takieddine Takieddine for defamation.

The Lebanese businessman is under investigation in a separate affair over arms sales to Pakistan in the 1990s.

Nicolas Sarkozy denies and allegations. Photograph: Martin Bureau/AFP/Getty Images

In April 2012, just before Sarkozy failed to get re-elected, the investigative website Mediapart published a document it said was signed by a senior Libyan figure stating the regime approved a payment of €50m.

Sarkozy told Canal+ television on Sunday that the document was a "fabrication" and "disgrace".

Referring to the international coalition that helped oust Gaddafi in 2011, he said: "Who led the coalition to topple Gaddafi? It was France. I was perhaps the leader. Do you think that if Gaddafi had anything on me I would have tried to oust him?"

Sarkozy took legal action against Mediapart over the document.

Shortly after Sarkozy's election in 2007, Gaddafi was invited to Paris and pitched his Bedouin-style tent in an official French residence near the Élysée as part of a controversial state visit.

After France took a key role in the 2011 international coalition that eventually deposed and killed the Libyan leader, Gaddafi's son Saif al-Islam claimed the regime had financed Sarkozy's campaign. "Sarkozy must first give back the money he took from Libya to finance his electoral campaign. We funded it and we have all the details and are ready to reveal everything," he told the Euronews network.

Sarkozy, whose supporters say could still try to make a political comeback in 2017, has faced various legal troubles since he was beaten by François Hollande in the 2012 election and lost presidential immunity.

Last month, a Bordeaux judge filed preliminary charges against Sarkozy over allegations he illegally took donations from the France's richest woman, Liliane Bettencourt, in the 2007 election campaign. He has denied any wrongdoing.

He is also at the centre of an investigation into whether he misused public funds to pay for opinion polls while in office.