Yesterday Mr Sarkozy, who was president of France between 2007 and 2012, was placed under formal investigation - the equivalent of charging a suspect in the United Kingdom - on suspicion of corruption, misuse of Libyan public money and breaking French law on election campaign funding.
Le Figaro newspaper published a lengthy account of what it said was a verbatim declaration by Sarkozy to magistrates.
As France24 reports: "Sarkozy was released earlier in the day after facing a second day of questions in the investigation, which is exploring allegations that [Gadhafi's] regime secretly gave Sarkozy €50 million [$62 million] for his inaugural presidential campaign in 2007". He even said once that Sarkozy must first give back the money he took from Libya to finance his electoral campaign.
After five years of investigation and two days of questioning in police custody, judges looking into the scandal decided they had enough evidence to charge the 63-year-old, who served as president between 2007 and 2012.
One of Mr. Sarkozy's former ministers and a close ally, Brice Hortefeux, was also reportedly questioned by police on Tuesday.
Separately, prosecutors recommended in September 2016 that Nicolas Sarkozy and 13 others stand trial over an alleged multi-million-euro fraud related to the illegal financing of his 2012 presidential election campaign.
"Since March 11, 2011, I live the hell of this slander", he told judges, according to French newspaper Le Figaro, which published his statement Thursday.
Allegations against Sarkozy also include concealment of Libyan public funds.
If found guilty, Sarkozy could get up to 10 years behind bars, although many are skeptical that a former president could be imprisoned and he much more likely would be given a fine. "The allegations were first made by one of the late dictator's sons, Saif al-Islam, in 2011".
The revelations came as Sarkozy was trying to win re-election, but he ultimately lost the 2012 race to Socialist Francois Hollande.
French media have been reporting that Sarkozy received more than 6 million dollars in cash.
His right-wing Republicans party has so far backed him publicly.
Sarkozy's immediate predecessor, Jacques Chirac, was tried and convicted in 2011 of misusing public funds to keep political friends in phantom jobs - making him the first French head of state to be convicted of a crime since Nazi collaborator Marshall Philippe Petain in 1945.
After becoming president, Sarkozy invited Gadhafi to visit France for a state visit at a time when the Libyan leader was considered an worldwide pariah by most other Western nations.