French judicial sources had said Friday that police at Glasgow airport had arrested Xavier Dupont de Ligonnes, who was subject to an international arrest warrant for the 2011 killings which transfixed France.
But DNA tests have now ruled out the arrested man by confirming he is not Dupont de Ligonnes, BFMTV reports.
A source close to the inquiry has also told AFP that the man held in Glasgow is not the murder suspect.
“The test turned out negative,” the source said, in the latest twist in the case since Dupont de Ligonnes disappeared eight years ago following the murder of his wife and four children in western France.
The French state prosecutor in Nantes, site of the murders, earlier said identity checks were being carried out to establish if the arrested man was really Xavier Dupont de Ligonnes.
“Investigators are going to Scotland to carry out the checks and the investigating magistrate is waiting for the results,” prosecutor Pierre Sennes told AFP.
The suspect was stopped at Glasgow airport on Friday after arriving on a flight from Paris, according to two French sources close to the investigation.
Sources said that a fingerprint match had been made but one said a DNA analysis was being conducted so as to be “totally sure” it was Dupont de Ligonnes.
Another source said the arrested man was travelling on a stolen French passport and had likely spent part of his time on the run in Britain.
58-year-old Dupont de Ligonnes is suspected of shooting his family dead and burying them under the terrace of their elegant townhouse in the western city of Nantes.
Their bodies were found three weeks after the killings, during which time Dupont de Ligonnes reportedly told his teenage children's school he had been transferred to a job in Australia.
He is said to have told friends he was a US secret agent who was being taken into a witness protection programme.
French prosecutors have said he killed all five of his victims in a “methodical execution”, shooting them each twice in the head at close range with a weapon fitted with a silencer.
He is believed to have covered them in quicklime and wrapped them in sheets before burying them under concrete.
Earlier on Friday, officers had picked out the suspect at the French capital's Charles de Gaulle airport, but there was not enough time to seize him, so they alerted British police, who confirmed an arrest had been made.
The man “remains in police custody in connection with a European Arrest Warrant issued by the French Authorities”, a Police Scotland spokeswoman said.
French newspaper Liberation reported that Dupont de Ligonnes had undergone plastic surgery to change his appearance, citing police sources.
For years France has been gripped by the question of how Dupont de Ligonnes had disappeared without trace, with some suggesting he may have killed himself. Hundreds of reported sightings only added to the mystery.
In 2015, a letter and photo of two of his sons, signed with his name and the message “I am still alive”, was delivered to an AFP journalist but experts could not verify its authenticity.
The alleged killer evaded a police dragnet in the Var region of southern France in January last year after witnesses reported seeing a man resembling him near a monastery.
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