Spain's Rajoy denies wrongdoing in kickbacks scandal

By Sarah White and Fiona Ortiz

MADRID (Reuters) - Spanish Prime Minister Mariano Rajoy on Saturday denied wrongdoing in a growing corruption scandal that threatens his credibility just as he makes headway against economic crisis.

The ruling People's Party (PP) has been buffeted all week by media reports alleging its former treasurers operated a slush fund with donations from construction industry executives that were then doled out to Rajoy and other party leaders.

"I need only two words: it's false," Rajoy said in a televised address after an extraordinary meeting of party leaders to discuss the allegations.

Rajoy, who has had a reputation for being boring but clean, welcomed an investigation into the affair and said he would publish his tax declarations on the internet.

Last week El Pais published extracts from what it said were secret ledgers by PP treasurers over 20 years.

"It is not true that we received cash that we hid from tax officials," Rajoy said. He did not take media questions.

The PP on Saturday also released findings from an internal probe into party accounts back to 1995, concluding payments to members and income from donations were correctly declared and legal. An external investigation would begin in weeks, the report said, and three auditing firms would pitch for the job.

Dozens of police in riot gear guarded PP headquarters in central Madrid on Saturday. A small gathering of demonstrators shouted "resign" outside the building after several hundred people protested there on Thursday and Friday nights.