Police officials confirmed late on Tuesday that several laptop computers and mobile phones belonging to the family of Austrian financier Martin Schlaff had been seized during a raid in December.
Investigators believe the data contain fresh evidence that will enable them to move forward with a long-running investigation into a corruption scandal surrounding the Sharon family that concerns illegal campaign contributions during the 1999 elections.
Until now, police have been unable to examine the equipment after a legal appeal by Schlaff's brother, James, that saw a court order temporarily prevent them from accessing the data, police said.
However, Schlaff has gone back on his complaint, meaning police will have access to the data "within the coming days", public radio said.
Police believe some of the money was used by the Sharon family to pay back campaign contributions that were later deemed illegal.
The story emerged late on Tuesday after Israel's private Channel 10 television obtained a police document outlining suspicions that was submitted earlier this week to a magistrates court near Tel Aviv.
Lior Horev, Sharon's strategic adviser, dismissed the report, suggesting it was an attempt to muckrake by elements with a political agenda.
"What have we discovered this morning that we have not seen during the last three and a half years that this investigation has been ongoing, aside from the fact that someone has asked to investigate the Schlaff brothers' computers?" he asked.
"They have taken a technical legal procedure with absolutely no significance and have exploited it for cynical purposes in order to get on Sharon's back two or three months before the elections," he said.
Sharon had been investigated in a series of other corruption scandals, such as the Greek Island Affair, but not once in the past three years had any police or official from the attorney general's office asked to investigate the premier in connection with this issue, he said.
Roni Bar-On, chairman of Sharon's centrist Kadima party, also dismissed the report as a political leak aimed at disrupting the elections.
"Nothing has been formally presented to the prime minister, and since the issue was first made public, the prime minister has been re-elected twice," he said, noting that the corruption scandal was made public just before the 2003 elections.
They have taken a technical legal procedure with absolutely no significant and have exploited it for cynical purposes in order to get on Sharon's back two or three months before the elections"
Sharon's strategic adviser
"And this time, it is the same story from the same source, with the same problematic timing - one or two months before the election."
Speaking to Israel public television, Nevot Teltsur, legal counsel for the Schlaff brothers, said there was nothing new in the police investigation and implied that the timing of the report was far from coincidental.
"I don't know of any evidence which apparently proves such a thing," he said late on Tuesday.
"There has been no breakthrough in the investigation except for an additional leak from the file, maybe in order to keep this file live on the eve of the elections, which is something I view as extremely serious."