Officials say former French President Nicolas Sarkozy is facing preliminary charges in an investigation linked to allegations that he took $67 million in illegal campaign funds from Libya's Moammar Gadhafi.
French Prime Minister Manuel Valls says the allegations against Sarkozy are serious and that the judicial investigation is being carried out independently of the Socialist government, which defeated Sarkozy in elections in 2012.
"No one is above the law," Valls told BFM television Wednesday.
Sarkozy is being investigated on suspicion he used his influence to secure leaked details of an inquiry into the alleged irregularities in his victorious 2007 election campaign. He is accused of influence peddling, corruption and benefiting from "the breach of professional secrets," the prosecutor's office said.
He was informed of the investigation during the early hours of Wednesday by investigating magistrates after he had been held until nearly midnight on Tuesday in police custody.
Sarkozy was held in a Paris suburb and questioned for over 15 hours by French police on Tuesday.
Former Prime Minister Alain Juppe, of Sarkozy's UMP party, tweeted support for Sarkozy: "His defense will show he is innocent, I hope."
The French daily Le Monde says the questioning centres around whether Sarkozy and his lawyer were kept informed about the investigation by a friendly magistrate.