A spokesman for London’s Metropolitan Police confirmed his arrest “under a European arrest warrant”.

“The warrant was issued by French authorities for offences of fraud and money laundering,” the spokesman added.

A court official said Mr Djouhri would remain in custody at least until another court appearance on Wednesday, at which “he could be released on bail or could be kept in prison” pending a formal extradition hearing.

Mr Djouhri, a 58-year-old Swiss resident, has been a focus of the inquiry opened in 2013 by judges investigating claims by former Libyan ruler Muammar Qaddafi and his son Saif Al Islam Qaddafi that they provided funds for Sarkozy’s election effort.

But Mr Djouhri, well known among France’s right-wing political establishment and a close associate of Mr Sarkozy, has refused to respond to summons for questioning in Paris.

Reported in the French media as being close to executives of the French environmental services group Vivendi Environnement, now called Veolia, he is often described as a go-between for deals involving water systems, trash collection and oil.

His lawyer did not respond to requests for comment.

In 2016, the former president’s links with Qaddafi came under heightened scrutiny after another businessman, Ziad Takieddine, admitted delivering five million euros ($6 million) from the Libyan leader for Sarkozy’s first presidential bid.

In a media interview, Mr Takieddine said he had made three trips from Tripoli to Paris in late 2006 and early 2007, each time carrying a suitcase containing 1.5-2.0 million euros in 200-euro and 500-euro notes.

Mr Sarkozy has dismissed the allegations as the claims of vindictive Libyan regime members furious over his participation in the US-led military intervention that ended Qaddafi’s 41-year rule.

French investigators expanded their investigation in 2016 to suspicions of embezzlement in the 2009 sale of a villa in the French Alps, for around 10 million euros, to a Libya investment fund managed by Bashir Saleh.

Mr Djouhri is suspected of being the true owner of the villa, which was sold at a "very inflated" price, a source close to the inquiry told AFP.

Both men failed to heed summons for questioning issued by the anti-corruption investigators in September 2016.

Investigators also suspect Mr Djouhri of helping Mr Saleh get out of France in early 2012, in a private jet headed for Niger, as he faced a Libyan arrest warrant a few months after Qaddafi’s overthrow.

Mr Saleh, Qaddafi’s former chief of staff and manager of Libya's multi-billion-dollar sovereign wealth fund, eventually escaped to South Africa, and has been sought since then.

In a series of conversations caught by wiretap, Mr Djouhri can be heard promising to send judges a letter whereby Mr Saleh would deny any Libyan financing of Mr Sarkozy’s campaign.