Merlins,
A current carrying wire produces a magnetic field around the wire in a clockwise direction with magnitude equal to:
B=u0*I/2PiR (Ampere's law)
Where B is the magnetic field magnitude, u0 is the permitivity of free space (a constant), and R is the radial distance from the wire (a known constant when you are measuring).
When magnetic flux passes through a conductive loop, the magnetic flux will simply be the dot product of the magnetic field with the area of the loop (from the area vector normal to the plane). For a small loop the strength of the field can be assumed constant.
IE, Phi = BAcos(wt) (Faraday's law)
It so happens that the derivative of the magnetic flux is the same as the electromotive force, ie, potential electric difference, ie voltage.
This loop will also have some resistance R, and we know from Ohm's law that V=IR.
Therefore, the current that will be induced in this loop which is near to the wire will be:
I = -wBAsin(wt)/R
This current can be measured with an ammeter, and the equations can be used to determine the original current of the wire in question.
Small currents will produce small magnetic fields which will induce small magnetic currents...to measure smaller currents, therefore, we can multiply the effect of the induced current by multiplying the number of loops by the same factor.
Thus, we use a solenoid with N loops and mulitply our answer by N.
And then all of the math of this can be combined using digital logic gates to construct multiplers etc, but I don't think I will go into that detailed of an explanation