A judge in Peru has ordered the arrest of ex-president Alejandro Toledo while prosecutors prepare criminal charges against the former leader for allegedly receiving $20m in bribes from the Brazilian construction giant Odebrecht in return for granting a lucrative contract to build a transoceanic highway between Brazil and the Peruvian coast.

Judge Richard Concepcion ordered 18 months “preventive” prison and issued both a national and international arrest warrant for Toledo, 70, on Thursday. The ex-president, who was in France last week, has angrily denied any wrongdoing when interviewed by Peruvian journalists. His lawyer said he would not flee but declined to say what country he was in.

Observers said the warrant marked the nadir of a precipitous fall from grace for Toledo, a one-time pro-democracy activist who headed street protests against the authoritarian former president Alberto Fujimori and pledged to clamp down on rampant corruption when he took office from 2001 to 2006. Fujimori is serving a 25-year jail sentence for human rights crimes, embezzlement and bribing the media. Many Peruvians are shocked that one of his leading adversaries could join him behind bars if found guilty.

Earlier this week, Peru’s attorney general’s office formally charged Toledo with asset laundering and influence trafficking. The move came after police and prosecutors raided his home in Lima on the weekend, seizing documents, videos, mobiles phones and more than $30,000 in cash.

Prosecutors allege the payments to Toledo were made through his friend Josef Maiman, a Peruvian-Israeli businessman who was also being investigated along with Odebrecht’s former boss in the country, Jorge Barata, whose testimony implicates the former president.

Toledo, who came eighth in an electoral bid last year, said the charges had been orchestrated by his “traditional enemies”. However, he said he would return to be Peru if he could be guaranteed a fair trial.

The president of Peru, Pedro Pablo Kuczynski, who served as Toledo’s economy minister and prime minister, urged the former leader to return home.

The attorney general’s office is also investigating two more former presidents, Alan García (2006-11) and Ollanta Humala (2011-16) for allegedly having received bribes as part of the widening Odebrecht scandal.

Gustavo Gorriti, a leading investigative journalist and pro-democracy campaigner, told local radio: “Toledo ended his government like the protagonist of a film about gangsters, who robbed and used power like a masquerade for what they really wanted.”

“Having been handed the noblest possible mandate he betrayed it the most vile way imaginable,” he added.

Gorriti who leads IDL-Reporteros, an investigative reporting outfit, told the Guardian the Odebrecht scandal could be “the biggest case of corruption in the history of Latin America”.

It is estimated that Odebrecht paid out more than $730m in bribes across 12 countries in Latin America, according to a journalistic investigation.