The Nigerian ambassador to Switzerland has dismissed allegations that funds stolen by former dictator Sani Abacha were misappropriated.
Under an agreement between the Swiss and Nigerian governments the funds must go to health and education projects, as well as infrastructure development.
"The Nigerian government is pleased with the way the money was used," said Ambassador Joseph Ubaka Ayalogu on Friday in the Swiss capital, Bern.
He was responding to reports, based on information by unnamed Swiss sources, that part of the funds handed back by Switzerland had vanished.
About $700 million (SFr836 million) was frozen in Swiss bank accounts in 1999 before judges ruled the money should be returned to the Nigerian government.
Ayalogu said the returned funds were used for projects in line with a bilateral agreement concluded last year.
He said the World Bank, which oversees the restitution of the money, would publish its findings before the end of this month.
Ayalogu said the allegations carried by a Swiss newspaper last week tarnished Nigeria's image in the world and could damage bilateral relations between the two countries.
He added that he had held talks with Swiss Foreign Minister Micheline Calmy-Rey earlier this week.
The foreign ministry for its part said it had done all it could to ensure that the funds were used properly in Nigeria.
The suspicions of misappropriation were backed by a Swiss non-governmental organisation. It said an investigation by a Nigerian NGO had shown that the restitution had not gone as planned.
Abacha and his associates are believed to have plundered more than $2.2 billion from state coffers in Nigeria.
swissinfo with agencies
Money laundering involves concealing the origins of money earned through criminal activities and releasing it unnoticed into legitimate business activities.
It is most commonly associated with drug trafficking, but not exclusively.
The Swiss Money Laundering Act obliges all financial intermediaries to identify all clients and to establish the beneficial owners of the assets.
They must also report any suspicion of money laundering to the authorities and freeze related assets.