Mr Al-Hilli, 50, from Surrey was killed along with his wife Iqbal, 47, his mother-in-law and a French cyclist last month in an attack that left his seven-year-old daughter, Zainab, badly injured, and her four-year-old sister Zeena deeply traumatised.
Mr Al-Hilli’s father Kadhim was once close to Saddam’s Ba’ath Party, but fell foul of the tyrant in the Seventies, and fled Iraq for Britain.
It raises the possibility that Mr Al-Hilli had managed to gain access to the account, which is thought to have remained in his father’s name, and that this was known to his killer.
The story was reported in the respected French newspaper Le Monde. It said that a French police source had revealed that the money’s source had been discovered by German intelligence agency BND.
The agency’s operatives routinely monitored the flow of cash to and from Baghdad as Germany did more business with the Saddam regime than any other country.
An intelligence source in Munich said last night: ‘They know the money trail, and they know how to follow it. They have spent decades monitoring money transactions between the West and Iraq. The BND is the first port of call in such circumstances.’
The BND said they had no comment on the report, saying: ‘We do not comment on operations.’
The Le Monde story was published under the headline: ‘The potential links between the Al-Hillis and Saddam Hussein.’
It said: ‘According to a French police source, the German secret service informed the gendarmerie’s anti-terrorist branch that there were links between the Al-Hilli family and Saddam Hussein’s fortune.
‘The tensions began after Saad Al-Hilli’s father [Kadhim] was struck off the list of beneficiaries of the former Iraqi dictator.’
Shortly after his murder, it emerged that Saad Al-Hilli had put a block on his father’s will, which effectively stopped his brother from inheriting his share until ‘unknown’ disputes were resolved.
Swiss investigators discovered the secret account earlier this month, but according to Le Monde they didn’t make the link to Iraq.
Kadhim, a former factory owner, left Baghdad in the late Seventies with his wife, Fasiha, and two boys, after allegedly falling foul of the Ba’ath Party. The family settled in Pimlico, Central London, later moving to Surrey.
Saddam is known to have concentrated large amounts in Switzerland and France, where he had at least two homes and moored a £17 million yacht.
If Saad Al-Hilli was party to this secret information – and indeed the location of the hidden millions – then he would have been an obvious target for an attack.
Eric Maillaud, the Annecy prosecutor leading the inquiry into the quadruple killing, said he had ‘not yet been informed’ about the intelligence from Germany.
However he confirmed that Mr Al-Hilli’s financial affairs and his background in Iraq were at the top of subjects being investigated.
Another theory previously mooted was that Mr Al-Hilli was targeted by Iranian spies desperate to get their hands on high-resolution satellite technology. The Briton was an expert in that field, and worked for Surrey Satellite Technology in Guildford.
Emmanuel Ludot, a French lawyer who defended Saddam Hussein following his capture, admitted that the deposed regime still had funds in Swiss accounts, but said the notion of a ‘hidden fortune’ was fantasy.
Further asked if his father had ever mentioned links to Saddam, he said: ‘We have no links with that regime. We live outside [Iraq] because of that regime, that’s why we have been here for 41 years.’