LONDON (Reuters) - A French businessman suspected by investigators of funneling money from former Libyan leader Muammar Gaddafi to finance Nicolas Sarkozy’s successful 2007 presidential campaign was granted bail when he appeared at a London court on Wednesday.

Alexandre Djouhri, 58, was arrested at London’s Heathrow Airport on Sunday on a European arrest warrant (EAW) issued by France after arriving on a flight from Switzerland.

London’s Westminster Magistrates Court heard Djouhri was wanted by the French authorities over nine allegations, including use of a fake document, active corruption of a foreign public official, conspiracy to misappropriate public funds and three charges of money laundering.

England’s Chief Magistrate Emma Arbuthnot said the accusations related to “very serious allegations of corruption” although his lawyer said Djouhri, who holds joint French and Algerian nationality, would fight extradition, arguing the case was politically motivated.

Sarkozy, who served as president from 2007 to 2012, has always denied receiving any illicit campaign funding and has dismissed the Libyan allegations as “grotesque”. Investigations into the 2007 campaign are ongoing and it is not yet known whether a trial will take place.

Sarkozy has been ordered to stand trial in a separate campaign finance investigation related to events in 2012, when he ran for a second term but was defeated by Francois Hollande.

As president, Sarkozy hosted Muammar Gaddafi for a lavish five-day visit in 2007 during which the former Libyan leader, then rekindling ties with Western powers after years of being ostracized, hosted visitors in a tent pitched for him in the garden of an official residence for important foreign visitors.

But in 2011 Sarkozy sent French forces to Libya as part of an international coalition following the Arab Spring uprising, resulting in the ousting and death of Gadaffi.

“WILD ALLEGATIONS”

“In response the Gaddafi family, and particularly his son from custody, began making ... wild allegations that the Gaddafi family had funded President Sarkozy’s campaign in 2007,” Djouhri’s lawyer Mark Summers told the London court.

He said the French inquiry, which began in 2013, had looked at suggestions “bags of cash” were brought from Libya to France but so far it had resulted in no charges being brought.

“As far as the main allegations are concerned, the understanding is that there hasn’t been any evidence uncovered,” Summers told the court.

Djouhri, who lives in Geneva and is a company director of a firm that deals with sanitation, water treatment and solar energy, had developed connections with Libya and North Africa and his expertise had been called upon by the French authorities since the 1990s, the court was told.

He was acquainted with Dominique de Villepin, who served as both foreign minister and prime minister between 2002 and 2007. A Reuters photo from 2014 shows Djouhri sitting next to Villepin at a soccer match in Paris.

Sitting impassively in the dock, bespectacled and wearing a suit, Djouhri listened as Summers said there were four substantive grounds on which extradition would be opposed.

Summers said there was an “overtly political genesis” to the allegations, the French inquiry was yet to charge anyone, the warrant issued by France was insufficient and he questioned the state of French prisons.

Djouhri, who earns about 200,000 pounds a year, was granted bail on condition that he pays security of one million pounds ($1.35 million), after Arbuthnot rejected an initial offer of 200,000 pounds, saying there needed to be a “really substantial security”.

He must also wear an electronic tagging device, remain in a specified area of London and report to police daily, while his passports and ID cards have already been seized. He will stay with his daughter, who lives in London, and the full extradition hearing will start on April 17.