The former French president appears increasingly threatened by a labyrinthine web of graft cases, and today's ruling is crucial as it paves the way for the potentially compromising diaries to be used against him.
The documents were initially confiscated as part of a probe into allegations Sarkozy took advantage of France's richest woman, 91-year-old Liliane Bettencourt, when she was too frail to know what she was doing in helping fund his successful 2007 election campaign.
Lawyers for Sarkozy had argued that confiscating the diaries was illegal as when in power, he benefitted from immunity from prosecution which should extend to the documents.
But today, the Cour de Cassation -- France's top court -- said there was no need to rule on whether the seizure was legal as Sarkozy is no longer being probed in the case.
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Judges investigating the Bettencourt case can therefore continue to use his diaries, which could also be of use in a separate probe into a huge payout made by the French state to disgraced tycoon Bernard Tapie in connection with the collapse of the Credit Lyonnais bank.
The diaries are reportedly seen as crucial to the case because they are thought to show how close he was to Tapie.
In an indication of how important the diaries are to the former president, Sarkozy is now suspected of having attempted to illegally obtain inside information about proceedings at the Cour de Cassation relating to the case, according to daily Le Monde.
A separate probe has been opened into these allegations, which are based on a phone conversation between Sarkozy and his lawyer -- both of whose phones were tapped by judges probing yet another corruption case involving the late Libyan dictator Moamer Kadhafi.