Spain's ruling party denies corrupt payments to PM

The newspaper report may further damage Prime Minister Mariano Rajoy's reputation (AP)

The ruling People's Party has denied that the Prime Minister, Mariano Rajoy, and other leaders received payments from a slush fund after a newspaper published what it said were secret party accounts going back almost two decades.

El Pais said the accounts showed 11 years of payments to Mr Rajoy of €25,200 a year and regular handouts to a number of other party leaders.

The report is bound to damage further the credibility of Mr Rajoy as he battles a deep recession and one of Europe's highest unemployment levels.

The People's Party secretary general, Maria Dolores de Cospedal, denied the allegations and said: "We have absolutely nothing to hide."