The allegation appeared Saturday in the online magazine Mediapart, which said it had a Libyan government document from December 2006 authorizing the payments to Sarkozy's campaign through a middleman, CNN reported.
Similar accusations have come up since last year. Last March, Gadhafi's son and designated heir, Saif al-Islam Gadhafi made the same allegation.
"The first thing we want this clown to do is give the money back to the Libyan people," Gadhafi's son said. "He was given assistance so he could help them, but he has disappointed us."
Meanwhile, Sarkozy, who leads the center-right UMP party is locked in a tight runoff vote for the presidency on May 6.
His chief opponent is Francois Hollande, leader of the center-left Socialist party.
Hollande is demanding a criminal inquiry into Sarkozy's campaign funding, the report said.