Spanish PM Mariano Rajoy admits 'mistake' over scandal

Embattled Spanish Prime Minister Mariano Rajoy has admitted to MPs that he made a mistake in trusting a disgraced former colleague.

But he told MPs claims he was corrupt were "lies and manipulations", and again defied calls for his resignation.

Mr Rajoy is appearing in parliament to answer claims over illegal payments from a slush fund run by the Popular Party's ex-treasurer, Luis Barcenas.

The claims sparked widespread anger and anti-government protests.

Revelations of apparent corruption have touched a nerve in Spain, hit by a double-dip recession and high unemployment.

Clashes erupted between anti-government protesters and police in mid-July after more than 1,000 people gathered outside the Partido Popular (Popular Party, PP) headquarters calling on the government to quit.

'Lies and manipulations'

Mr Rajoy appeared before MPs after threats of a no-confidence vote.

In opening remarks, he said he was appearing to rebuff the "lies, manipulations and malicious insinuations encouraged by certain political leaders" over the scandal.

He suggested that the Spanish economy was beginning to recover from years of crisis, and expressed concern that a continued focus on the scandal was damaging Spain's image.

For the first time, he admitted making a mistake by putting trust "in someone who we now know did not deserve it". But he denied "committing the criminal offence of covering up for someone who is alleged to be guilty".

Mr Barcenas is in custody while being investigated over other corruption allegations.

Mr Rajoy repeated that he would not resign, and said Spaniards should await the outcome of judicial investigations into the affair.

"Justice will show there was nothing illegal in my own behaviour or that of my party," he said.

In response, the leader of the country's main opposition Socialist Party, Alfredo Perez Rubalcaba, said Mr Rajoy was not in the chamber to debate the state of the Spanish economy.

He said it was Mr Rajoy's "resistance" to answering parliament that was causing damage to Spain, and said the PP had won elections over 20 years on the back of a system of illegal financing.

He refused to withdraw a motion of censure against Mr Rajoy.

Even if Mr Rajoy did not respect parliament, he said, "he should respect the intelligence of Spaniards".

"You must go, Mr Rajoy," he said.

Pressure on PM Rajoy and his ruling party has intensified in recent weeks

Representatives of other parties later denounced the president's claims that he knew nothing of wrongdoing by Mr Barcenas, saying their relationship was too close to make such a claim credible.

Text messages

The scandal originated in a 2009 judicial investigation into corrupt payments involving PP members.

In January this year, El Pais newspaper published an list of alleged illegal payments within the party.

The list was signed off by Mr Barcenas, who is currently in custody on corruption and tax fraud charges, with his role in the scandal still being investigated.

He originally denied allegations that he wrote documents, but later admitted they were in his handwriting.

The former party treasurer now says he made numerous bonus payments - in cash - to Mr Rajoy and other senior party members, out of the party slush fund of donations by businesses.

Mr Rajoy and other PP members have repeatedly denied that they received illegal payments and have accused Mr Barcenas of trying to blackmail them.

The PP's deputy leader, Maria Dolores de Cospedal, has been summoned to appear before investigating judge Pablo Ruz on 14 August.

Calls for Mr Rajoy to resign intensified after private text messages published by El Mundo newspaper suggested that he had friendly ties to Mr Barcenas from May 2011 to March 2013.

Mr Rajoy admitted sending messages of support to Mr Barcenas.

However, throughout the scandal, Mr Rajoy has at no point given any indication he would resign, says the BBC's Tom Burridge in Madrid.

The PP was handed a clear mandate by Spanish voters at the end of 2011 and as a result Mr Rajoy and his party enjoy a clear majority in parliament.

The corruption allegations coincide with Spain's worst economic crisis for decades, and have threatened to destabilise government attempts to shore up public finances and bring the recession to an end.