Riot police clashed with protesters in Madrid late Saturday and impromptu demonstrations broke out in several other Spanish cities following the prime minister's televised denial that he had accepted under-the-table payments.
Prime Minister Mariano Rajoy promised to publicly disclose the amount of funds in all his personal bank accounts, denying recent media reports that allege he and members of his governing conservative Popular Party accepted or made under-the-table payments.
Speaking at a special executive committee meeting on Saturday at his party's Madrid headquarters, Rajoy said "it is false" that he received or distributed undeclared money.
"Next week, my statements of income and assets will be made available to all citizens," he said, adding they would be published on the official website of the prime minister.
By late Saturday it was clear Rajoy's pledge had failed to defuse popular disquiet as riot police cordoned off several of Madrid's main avenues in a bid to stop protesters from gathering in large groups.
Attorney General Eduardo Torres-Dulce said Friday there is sufficient cause to investigate allegations of irregular financing within 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 the once booming construction industry, before the sector imploded in 2008. El Pais said nearly two-thirds of the alleged payments violated Spain's party financing laws.
"I have never received or handed out 'black money' in this party or anywhere else," Rajoy said.
Following the appearance of the allegations, opposition parties demanded Rajoy break his silence of recent days, with some calling for his resignation and the holding of national elections.
Demonstrations broke out late Saturday in Madrid, Barcelona, Alicante, Valladolid, and Sevilla calling on the party to explain its finances. A strong police presence has in every case stopped protesters from getting close to Rajoy's Popular Party headquarters, saying the demonstrations were not legally convened.
"It's absurd," said Miguel Gomez, 30, demonstrating about 100 yards (90 meters) from Rajoy's party headquarters in downtown Madrid — as close as protesters could get. "They're telling us these payments don't appear in the books, but of course they don't. We're talking about 'black cash.' They're having a laugh at our expense."
The revelations come at a delicate moment for Spain, which is beginning to show signs of convincing investors and European authorities that it is serious about reforming the economy and keeping its finances in check to avoid a full bailout like Greece, Portugal, Ireland and Cyprus.
The scandal broke when the National Court reported recently that Barcenas had amassed an unexplained €22 million ($30 million) in Swiss bank accounts several years ago.
Barcenas was the party's long-time treasurer, but resigned in 2009 when his name first appeared in the court's probe into alleged irregular financing practices by the party. His lawyer has denied the Swiss account money was illegally obtained or linked to the party.
The lists published by El Pais said the documents showed that as of 1997, Rajoy received about €25,000 ($34,000) in "envelopes" each year.
"They need to resign for sure and return the money," said Eva Caballero, 52. "They also should be banned from politics and we need a strict ethical code in politics."
Many of the payments occurred during Spain's boom years of the late 1990s when the Popular Party was in power and the construction industry made the country one of the most successful economies in the European Union.
The corruption scandal is the latest to rock Spain, with dozens of other cases involving bankers, politicians, town councilors and even the royal family. But this one has shocked people more, given that Rajoy and his party are demanding enormous sacrifices of Spaniards as the country battles a double-dip recession and 26 percent unemployment.