Nigeria's anti-graft agency said on Wednesday it had arrested a former governor of the southwest oil-producing state of Ondo accused of stealing 25 billion naira ($171 million) of public funds.

Olusegun Agagu was arrested a week after an appeals court annulled his victory in the April 2007 election and stripped him of constitutional immunity from criminal prosecution.

"I can confirm that he was arrested today," a spokesman for the Economic and Financial Crimes Commission (EFCC) said.

Nigeria's 36 state governors have power over millions of dollars of public funds and also enjoy immunity from prosecution while in office.

Agagu, at the helm from May 29, 2003 to Feb. 23, 2009, is the eleventh governor who served under former president Olusegun Obasanjo to face corruption charges.

President Umaru Yar'Adua came to power nearly two years ago pledging zero tolerance for corruption in one of the world's most tainted countries but faces questions over his commitment to the campaign.

Many government officials in the world's eighth biggest oil exporter looted public funds with impunity and the sight of some ex-leaders in the dock has caused a stir across Nigeria, where they were once seen as scared cows.

But prosecution has been slow and anti-corruption activists are worried there has been no real progress in cases against the former governors, some of whom were charged nearly two years ago and released on bail.

A Nigerian court last December fined an ex-governor of the southwest state of Edo, Lucky Igbinedion, 3.5 million naira for embezzling 2.9 billion naira, which he paid as an option to serving six months in jail.