They are confiscating the money, which they believe was part of a much larger amount paid to Raul Salinas for helping Mexican and Colombian drugs cartels during his brother's six-year term ending in 1994.

Mr Salinas' lawyers have maintained he was legally heading an investment fund for Mexican businessmen but the Swiss federal prosecutor, Carla del Ponte, described Salinas' business dealings as unsound, incomprehensible and contrary to customary business usage.

"The business dealings he claims are beyond all economic logic," Ms Del Ponte said.

Mexican responsibility

She ordered the proceeds from drugs dealing to be confiscated by the state but charges of money laundering against Raul Salinas have been dropped for technical reasons.

The Swiss investigators said as proceedings were already under way in Mexico, the Mexicans should take sole responsibility to press charges.

Raul Salinas is currently in jail there, where he is standing trial on charges of illegally enriching himself during his brother's term of office as well as masterminding the murder of a political rival.

The investigation began after Mr Salinas' wife tried to withdraw more than $80m using a forged passport in November 1995 and for the past three years the Swiss authorities have been investigating the origins of $114m deposited in Swiss bank accounts.

Carlos Salinas, who was in power from 1988 to 1994, has always denied any knowledge of his brother's financial dealings.