Nicolas Sarkozy in French regional elections
Former president Nicolas Sarkozy is under investigation over campaign funding.REUTERS/Vincent Kessler

Paris prosecutors have confirmed that former President Nicolas Sarkozy is under investigation as part of a probe into election campaign funding. The probe relates to Sarkozy's 2012 re-election campaign - and could have serious ramifications for his chances of running again for the Republican Party in 2017.

Sarkozy, 61, has already been questioned and informed he is under investigation for "suspected illegal financing of an election campaign for a candidate, who went beyond the legal limit for electoral spending," Paris prosecutors have said. The development means Sarkozy could be involved in legal wrangling for months even if no charges are brought.

The former president has consistently denied involvement in a false-invoicing scheme centring on Bygmalion event-organisation company, which has led to the suspension of four senior figures in his campaign including Sarkozy's treasurer and campaign manager. In a recent book Sarkozy claimed: "It will no doubt be hard to believe, but I swear it is the strict truth: I knew nothing about this company until the scandal broke."

Today's announcement suggests there is insufficient evidence to pursue the Bygmalion allegations. Even if found guilty of the lesser charge of breaking spending limits Sarkozy could only be fined a maximum €3,700. "I can say that I'm satisfied that the law in large part has been kept to and there was nothing linking Nicolas Sarkozy to the Bygmalion case," said Sarkozy's lawyer Thierry Herzog. "It is only about exceeding the amount of campaign spending."

However with primaries set for November (2016) ahead of next year's elections the timing could hardly have been worse for Sarkozy, hoping to regain a position he held from 2007 to 2012 when beaten by Francois Hollande. Hollande has not yet indicated if he will run again and Sarkozy, who retired after his defeat only to re-enter the fray two years later, is already trailing to fellow right winger, former prime minister Alain Juppé.