A serious move by French Police, following serious allegations against a former president.

Nicolas Sarkozy has been arrested on allegations he received illegal campaign funding from the late Libyan leader Muammar Gaddafi.

He's accused of using the funds for his 2007 presidential campaign.

Europe correspondent Gavin Grey told Kate Hawkesby a former associate claims to have handed over the cash.

"The handover agent alleges that the cash totalled to roughly $8 million New Zealand, so very serious accusations."

Sarkozy has denied wrongdoing since the allegations first emerged in 2013.

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