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Former president Nicolas Sarkozy on Thursday resigned from France's top constitutional body after it upheld a decision that he had breached official spending limits during last year's election campaign.
After a decision that threatened to throw the main opposition UMP -- already reeling from a leadership battle -- into further chaos, Sarkozy said in a statement to AFP that he was resigning "immediately" from the Constitutional Council.
This was to "regain his freedom of speech" to react to the decision, which sees him lose out on a 10 million euro ($13 million) reimbursement. Former presidents are automatically appointed to the body.
The Council, the country's top constitutional authority, said in a statement that it was confirming a decision by France's electoral finance watchdog that Sarkozy had filed expenses of nearly 23 million euros, which exceeded the spending ceiling by 2.1 percent.
Because of this Sarkozy, who lost to Socialist Francois Hollande in the vote, is not eligible for the reimbursement of 47.5 percent of total campaign spending he was due under election financing laws.
Sarkozy will also need to return 150,000 euros advanced by the state for the campaign.
It is the first time that a candidate reaching the second round of presidential elections has seen his campaign expenses rejected.
Sarkozy has been implicated in a series of campaign funding scandals allegedly involving Liliane Bettencourt, France's richest woman, and former Libyan dictator Moamer Kadhafi. But he has consistently denied any wrongdoing.
The UMP is already in financial trouble as its funding has been affected by the fall in the number of its lawmakers. French parties receive grants from the government based on their strength in parliament.
UMP leader Jean-Francois Cope called for a "massive national contribution" in the wake of Sarkozy's resignation, saying it was necessary to "prevent the French political arena from being monopolised by the left and radical parties."
Cope, who held an emergency meeting with Sarkozy late Thursday, said the Council's ruling would seriously affect the "means available to the main opposition party to serve French democracy."
The decision also comes just days after UMP activists voted to maintain Cope as the party head until 2015 and the organisation of primary elections a year later to pick its presidential candidate.
Although Sarkozy has not said anything officially about making a comeback, people close to him have said he is keen to return to the political scene.