Nicolas Sarkozy's best man Nicolas Bazire charged

At the time, Mr Bazire (R) worked for Mr Balladur's election campaign

The best man at French President Nicolas Sarkozy's wedding has been charged with misuse of public funds.

Nicolas Bazire, 54, was charged by magistrates investigating allegations of corruption in the election campaign of Edouard Balladur in 1995.

Mr Bazire denied any involvement in the matter, his lawyer said.

Mr Sarkozy had been a spokesman for Mr Balladur, but a presidency statement said he "never exercised the slightest authority in the campaign financing".

'Petty political manipulation'

Magistrates are investigating whether the failed Balladur presidential election campaign received kickbacks from an arms contract selling submarines to Pakistan.

Mr Bazire was arrested on Wednesday and questioned overnight before being charged and released on Thursday.

His lawyer, Jean-Yves Lienard, said his client had during questioning stressed his "total lack of involvement" in the matter, AFP news agency reported.

Mr Bazire, a board member of luxury goods giant LVMH, was best man at Mr Sarkozy's wedding to supermodel Carla Bruni in February 2008.

Another Sarkozy ally, Thierry Gaubert, was arrested in relation to the case on Wednesday and has also denied any involvement.

Investigations into the case began after 11 French engineers were killed in a Karachi bombing in 2002, amid allegations the attack was in revenge for unpaid bribes.

The Elysee Palace distanced the president from the affair, issuing a statement on Thursday saying: "Mr Nicolas Sarkozy did not manage Mr Edouard Balladur's campaign. He never exercised the slightest authority in the financing of this campaign.

"As far as the so-called 'Karachi affair' is concerned, the head of state's name does not appear in any part of the dossier. His name has been cited by no witness nor actor in this case."

It said Mr Sarkozy, as finance minister at the time, opposed the submarines deal.

"Everything else is just slander and petty political manipulation," the palace said.

Mr Sarkozy, who faces an election campaign next April, has himself been accused this year of taking illegal donations from L'Oreal heiress Liliane Bettencourt.

He strongly denies any wrongdoing.