Zambia probes ex-leader's wife for money laundering

* Investigators question former first lady

* Banda says Sata misled

LUSAKA Feb 3 (Reuters) - Zambian police have questioned the wife of former president Rupiah Banda about the source of funding for a luxury villa, the latest in a string of investigations into high-profile figures by the southern African country's new government.

President Michael Sata has made fighting corruption one of his priorities since ousting Banda in September. His administration has reversed several deals made during Banda's term and launched probes into a host of other transactions.

Sata directed law enforcement agencies in December to investigate the purchase of the villa that Thandiwe Banda owns jointly with other members of a private trust.

Police spokeswoman Charity Munganga said the former first lady was questioned on Friday for allegedly abusing authority and laundering money during the purchase of the villa.

"The former first lady co-operated very well and our investigations are continuing," Munganga said.

Banda told supporters in Lusaka that his wife was innocent and the truth would soon come out. He said Sata would soon realize that he had been misled.

Last month, the government said it was investigating former finance minister Situmbeko Musokotwane over a tax deferment agreement he concluded with an Indian company.

It has also said it will take full control of fixed-line operator Zamtel from Libyan owner LAP Green Networks after an inquiry in November ruled the 2010 transaction illegal.

Officials are also looking into the 2007 sale of a 49 percent stake in state-owned Zanaco Bank to Rabobank of the Netherlands. (Reporting by Chris Mfula; Editing by Helen Nyambura-Mwaura)