France's Sarkozy says no Libyan money went into winning 2007 campaign
The 71-year-old, who has always denied any wrongdoing, last year became modern France's first former president to have gone to jail over the case.
"The truth is that there wasn't a single cent of Libyan money in my campaign," Sarkozy said.
A lower court in September found the right-wing politician, who was president from 2007 to 2012, guilty of seeking to acquire funding from Muammar Gaddafi's Libya for the campaign, but did not rule that he received or used it for the campaign.
The court sentenced him to five years behind bars, 20 days of which he served before he was released pending the appeal.
In the initial trial, prosecutors had argued Sarkozy's aides, acting in his name, struck a deal with Gaddafi, promising in return to help restore the Libyan leader's international image after Tripoli was blamed for two plane bombings.
The West laid the blame on Libya for the bombing of the Pan Am Flight 103 in 1988 over Lockerbie in Scotland -- which killed 259 people -- and of the UTA Flight 772 over Niger the following year, which took the lives of 170 people.
Relatives of those killed in the 1989 bombing spoke of their ordeal at the appeal trial last week.
"You can only respond to such indescribable suffering with truth," Sarkozy said on the first of several days of taking the stand, with his wife, model and singer Carla Bruni, in the courtroom.
"But you cannot repair suffering with an injustice: I am innocent," he said.
The ex-leader denied his aides made any promises to Gaddafi's then military intelligence chief Abdallah Senussi, who had been linked to the bombings.
A French court had in 1999 sentenced Senussi to life in jail in absentia for the attack on UTA Flight 772, and he has been wanted for questioning over the Lockerbie bombing.
"The truth is that never, never did I promise or act in favour of Mr. Senussi," Sarkozy said, adding that he was a key player in launching military action against Gaddafi during the Arab Spring.
A French warplane was the first to enforce a UN resolution calling for a no-fly zone and protection of civilians in Libya.
The appeal trial is set to run until June 3, with a verdict expected in the fall. If convicted, Sarkozy faces up to 10 years in prison.
Sarkozy has faced a series of legal issues since leaving office and has already received two definitive convictions in other cases.