THE Israeli attorney general’s office said yesterday that it was probing a French tycoon’s claim that he funded Prime Minster Benjamin Netanyahu’s election campaign to the tune of €1 million (£785,000)

Billionaire playboy Arnaud Mimran made the admission under oath in a Paris court where he is on trial for his role in a €283m (£222m) VAT-dodging scam.

Israeli media ran photos yesterday of Mr Netanyahu on holiday with the alleged crook in Monaco in 2003.

Attorney General Avichai Mandelblit will decide whether to press charges following the investigation. If the allegations are proven, such a sum would violate Israel’s campaign finance laws.

The Israeli prime minister’s office did not deny there was a contribution but said any money received by Mr Netanyahu was taken lawfully as a private citizen and was not part of any election campaign donation.

In Paris Mr Mimran was quizzed over more than a dozen trips he made at the height of the claimed scam to Israel in 2009, a general election year.

The judge asked: “You have also funded Netanyahu?” Mr Mimran’s lawyer interjected: “That’s what the press claims.”

“No, it is on record in the criminal file,” said the judge, to which Mr Mimran replied: “I paid him a million.”

“Was that a loan that was repaid?” asked the judge. “No,” said Mr Mimram.

Under Israeli electoral law it is illegal for a parliamentary candidate to accept more than 11,480 shekels (£2,075) from an individual or for a party leadership candidate to take more than 45,880 shekels (£8,300).

Mr Mimran and his 11 alleged co-conspirators are accused of buying carbon trading credits in VAT-free European countries and then selling them on in France, where they charged the full 19.6 per cent rate but never paid that money to the government.

Five suspects are reported to have fled to Israel, taking advantage as Jews of the state’s Law of Return.

In his closing arguments on Thursday the prosecutor asked for a 10-year sentence for the defendant.