Former French president, Nicolas Sarkozy, has been taken into police custody over allegations that he received millions of euros in illegal election campaign funding from late Libyan dictator, Muammar Gaddafi.

Sarkozy, 63, who was France’s rightwing president from 2007 to 2012, was questioned on Tuesday morning at a police station in Nanterre, north-west Paris.

Sarkozy has repeatedly denied the allegations, dismissing the claims as, “grotesque.”

Investigators are examining claims that Gaddafi’s regime secretly gave Sarkozy €50m overall for the 2007 campaign.

The alleged payments would violate French rules against foreign financing and declaring the source of campaign funds.

In April 2012, the investigative website Mediapart published a document it said was signed by a senior Libyan figure stating the regime approved a payment of €50m to “support” Sarkozy’s election campaign.

It would be recalled that after becoming the French president, Sarkozy invited the Libyan leader to France for a state visit and welcomed him with high honours.

But Sarkozy then put France in the forefront of Nato-led airstrikes against Gaddafi’s troops that helped rebel fighters topple his regime in 2011.

In March 2011, Gaddafi’s son Saif al-Islam Gaddafi told Euronews: “Sarkozy has to give back the money he accepted from Libya to finance his electoral campaign.

“We financed his campaign and we have the proof. The first thing we’re demanding is that this clown gives back the money to the Libyan people.”