BUENOS AIRES (Reuters) - President Cristina Fernandez hunkered down in her presidential residence for a week before speaking about the mysterious death of a state prosecutor who claimed she sought to whitewash Iran's alleged involvement in a 1994 bomb attack on Argentine soil.
When she did, Argentines were left in little doubt who she viewed as the victim in the scandal.
It was not Alberto Nisman, whose body was found in a pool of blood with a single bullet to the head a day before he was to detail his investigations, and to whose family Fernandez offered no condolences.
It was herself, the target of a murky plot to smear her name orchestrated by rogue agents kicked out of a spy agency that she said had failed to act in the interests of the country.
"Twenty one years after the attack and today somebody comes up with a baseless claim that we wanted to derail the investigation," Fernandez said in her hour-long televised address, dressed all in white and seated in a wheelchair.
"Let them say what they want, let them make any allegations they want, let judges summon me, I'm not bothered."
Nisman's death has triggered one of the biggest political crises of Fernandez's seven-year rule and may bolster the opposition's chances of a win in October's presidential election.
Fernandez herself is barred from running, but some officials close to the president worry her handling of the scandal is denting the government's credibility.
"This is going to hurt us," said one government source close to the presidency who is not authorized to talk publicly. "How badly, we don't know. Only she decides what she is going to do."
Fernandez, who has been recovering from a fractured ankle in her residence, speculated in a rambling post on Facebook that Nisman's death might be suicide. Days later she wrote that he had been murdered.
Her inconsistencies have helped fan conspiracy theories, some pointing directly to her. A poll by the local political consultancy Management & Fit showed 63 percent of respondents believed Fernandez's image would be significantly weakened.
The day after Nisman's death, protesters marched on Fernandez's official residence. Some banged on the gate shouting "murderer".
"She's not in the habit of recognizing her errors, be it Nisman or inflation. And so she stays inside," said Roberto Lavagna, a former economy minister under Fernandez's late husband predecessor, Nestor Kirchner, now working with opposition presidential hopeful Sergio Massa.
The week before his death on Jan. 18, Nisman had accused Fernandez of opening a secret back channel to Tehran to clear a number of Iranian suspects and whitewash the 1994 bombing of a Jewish center as part of a grains-for-oil deal.
The government calls the claim "absurd". It says Nisman was duped into making his allegations and then killed when he was no longer useful to the spies who led the conspiracy against the president.
The mysterious circumstances have re-ignited debate on the murky relationship between the government, intelligence services and the judiciary and stoked a long-held mistrust of political leaders in the run-up to this year's election.
It has also piled pressure on the leftist government as it grapples with a debt default and a stagnant economy.
"This affair should strengthen society's preference for change in this year's election," said political analyst Ignacio Labaqui at Medley Global Advisors. "It negatively affects the chances of any of the government's presidential aspirants attracting independent voters."
In her TV address, Fernandez unveiled surprise plans to dismantle the powerful SI intelligence agency, which she portrayed as sinister and accountable to no one.
In the "dirty war" directed by Argentina's military dictatorship of 1976-1983, the agency spied on Marxist rebels, labor unions and other leftists. Since democracy was restored, successive governments are widely believed to have continued using the agency to snoop on opponents.
Fernandez said a new, more transparent agency would be created. Oversight of wiretapping would be handed to the prosecutor general.
But her opponents are skeptical, with some suspecting Fernandez wants to hand control of a new intelligence agency to loyalists. They argue the step is more about protecting herself than democratic reforms.
"Everything she does is about her," said Federico Pinedo, head of presidential aspirant Mauricio Macri's opposition PRO bloc in the lower house. "She has control of Congress and can do whatever she wants."
It is not the first time Congress, dominated by allies of Fernandez, is being asked to hurriedly push through legislation.
In September, lawmakers passed a bill revising how Argentina would pay some foreign debt in a bid to skirt U.S. court rulings over its defaulted bonds. Argentina is, the president has said, the victim of "economic terrorists" in its lengthy legal battle with U.S. investors.
The new law failed to fix the default and instead reinforced their belief that Fernandez had no intention of negotiating with the U.S. creditors she has branded "vultures".
"Fernandez has her own way of functioning which very much relies on her own intuition and certainties, as opposed to evidence and realities that she prefers to ignore," said Argentine historian Federico Finchelstein.
Additional reporting by Sarah Marsh, Nicolas Misculin and Brian Winter; Editing by Kieran Murray