The French intelligence officer at the centre of the Clearstream corruption scandal has refused to give evidence to the inquiry, his lawyer says.
General Philippe Rondot was escorted from his home by police
General Philippe Rondot, seen as a key witness, was taken by police to appear before investigating magistrates.
He had earlier stopped talking to them, complaining of leaks to the press.
It is alleged that Dominique de Villepin, now prime minister, once asked him to find compromising evidence against his rival, Nicolas Sarkozy.
Mr de Villepin and Gen Rondot deny the claims.
Mr de Villepin and Mr Sarkozy are rivals to be the right's candidate for the presidency next year.
Gen Rondot, a 69 year-old senior intelligence official, has given evidence to the inquiry, but stopped answering questions after parts of his notes - implicating the prime minister and President Jacques Chirac - were leaked to the media.
On Monday, he again refused to answer magistrates' questions, the French news agency AFP reported.
His lawyer Eric Morain said Gen Rondot "reiterated his demand to be questioned in the presence of his lawyer, which was turned down, so he refused to answer the judges' questions".
It is alleged that Mr de Villepin, at the behest of President Jacques Chirac, commissioned a covert inquiry into claims that Mr Sarkozy had an account with a Luxembourg finance house, Clearstream, through which kickbacks from a defence contract were supposedly being laundered.
At the centre of the affair was a list naming politicians, including Mr Sarkozy, who were allegedly involved.
A judge conducting an official inquiry ascertained that the claims were false and investigating magistrates are trying to figure out who fabricated them and why.
Last week, a senior executive at European aerospace and defence group EADS, Jean-Louis Gergorin, admitted sending the list to a judge but denied creating it.
He earlier resigned to defend himself against claims of his involvement.