L'Oreal heiress Liliane Bettencourt has sold a Seychelles island at the centre of a tax evasion case, says the government of the island chain.

Mrs Bettencourt sold D'Arros island for $60m (£39m), having bought it in 1998 for $18m, said Seychelles Habitat Minister Christian Lionnet.

He said she had also agreed to settle $8m in unpaid taxes from its purchase.

The island purchase came to light in 2010 when Mrs Bettencourt was being investigated by French tax authorities.

The 89-year-old heiress is now back in the spotlight amid allegations that she made illicit donations to the election campaign of former French President Nicolas Sarkozy.

Mr Sarkozy's house was raided a month ago as part of the police investigation.