Story highlights Sarkozy calls the allegation that he took campaign funds from Gadhafi "grotesque"

He challenges Saif al-Islam Gadhafi to produce proof of donations in 2007

Sarkozy is running for re-election as president of France, with voting on April 22

French President Nicolas Sarkozy has denied taking money from the Gadhafi family during his 2007 run for France's highest office, calling the allegation "grotesque."

He said the late Libyan dictator Moammar Gadhafi was "known for talking nonsense," and challenged his son Saif al-Islam Gadhafi to produce records of the donations.

Sarkozy was responding to allegations which surfaced on the Internet ahead of the French presidential election scheduled for April 22.

"I am sorry that a big channel like TF1 is taking from information from the documents from Mr. Gadhafi or his son," Sarkozy said in the interview, which aired on Monday night on TF1.

"When one quotes Mr. Gadhafi, who is dead, or his son, who is standing trial, the credibility is zero. And when you drag up their accounts with these questions you are asking, you quite degrade this political debate," he said in an attack on interviewer Laurence Ferrari.

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Gadhafi was toppled in a civil war last year and killed after several months in hiding. His one-time heir apparent, Saif al-Islam was captured by Libya's new authorities and is awaiting trial.

It's the second time in as many weeks that Sarkozy has made headlines with a nationally televised interview.

Last week, he said France has too many foreigners and is not integrating them properly.

"Today we have a problem," Sarkozy said on France 2 TV on March 6.

"Our system of integration is working worse and worse, because we have too many foreigners on our territory and we can no longer manage to find them accommodation, a job, a school," he said.

France places a premium on national identity, pressing the population to put "Frenchness" before religion or national background.

Sarkozy is running for a second term in office.

He faces a strong challenge from Francois Hollande of the Socialist party and a range of candidates from smaller parties, including the far-right Marine Le Pen.

If no candidate wins a majority in the first round, there will be a second round on May 6, with the top two finishers facing off.