Spain's prime minister has denied reports that allege he and members of his governing Popular Party accepted or made under-the-table payments.

Speaking at a special executive committee meeting at his party's Madrid headquarters today, Mariano Rajoy said "it is false" that he received or distributed undocumented money.

Attorney general Eduardo Torres-Dulce said yesterday there is sufficient cause to investigate allegations of irregular financing within Mr Rajoy's party.

Leading newspaper El Pais has published details of secret papers belonging to former party treasurer Luis Barcenas allegedly documenting undeclared payments.

The money was allegedly paid by businesses, many linked to construction. El Pais said nearly two-thirds of the payments violated Spain's party financing laws.

But Mr Rajoy insisted: "I have never received or handed out 'black money' in this party or anywhere else."

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