Son-in-law of Spanish King 'stole millions of euros of public money'

Iñaki Urdangarin. pictured with his wife Princess Cristina de Borbon, denies any wrongdoing (EPA)

For months Iñaki Urdangarin, the King of Spain's son-in-law, has been at the centre of a full-scale legal investigation – and correspondingly sensational newspaper headlines – about the alleged siphoning off millions of euros of public money to tax havens across the world.

But in what is possibly the most spectacular development to date, Spanish newspaper El Pais yesterday claimed that Mr Urdangarin, the Duke of Palma, is set to face four separate charges over the case: defrauding the exchequer, falsifying documents, misappropriation of public funds and prevarication.

Leaks from the corruption investigation are said to have indicated that a not-for-profit organisation, Noos, of which Mr Urdangarin was co-president between 2004 and 2006, allegedly channelled public money, gained by grossly overcharging regional Spanish governments for the organisation of mainly sports-related events, into private bank accounts.

Mr Urdangarin has repeatedly denied any wrongdoing, saying before two marathon weekend sessions of questioning by a Mallorca court last month, that he had demonstrated his innocence.

Citing sources close to the nine-month legal investigation, El Pais insisted that the former Olympic handball player will allegedly avoid only one of five possible charges.

For months now, gory financial details from the case – the alleged tax dodges of more than half a million euros via a NGO for children with terminal illnesses, the apparent charging of €700,000 (£580,000) for a 13-page financial report on a football club stadium and the use of offshore companies in Belize and the UK – have found their way out of Spain's leaky judiciary system and into front-page newspaper reports.

The scandal has caused untold damage to the public image of a monarchy that was previously famed for its squeaky-clean reputation. And if Spain has always had a bare handful of urban myths about potential minor regal misdemeanours, for years there appeared to be an unspoken pact among the media that members of their royal family could not be criticised.

Not now. As Spain struggles with five million unemployed and a seemingly inescapable lurch into recession, the allegations that a key member of the monarchy may have been exploiting his unelected position for private gain could hardly have come at a worse time. Mr Urdangarin's wife, the Infanta Cristina, not suspected of any wrongdoing.

The royal family sidelined the Duke of Palma from official duties months ago, after a spokesman described his behaviour as "less than exemplary," but there appears to be no plan to expel Mr Urdangarin from the royal family altogether, even if his figure in Madrid's waxwork museum has already suffered that fate.

Mr Urdangarin's image has been shifted from the tableau of royal figures to a comparatively lowly spot in the sports hall and, presumably, had he not clinched bronze medals in two Olympics, could have been removed altogether.

Following the as yet unproven claims in El Pais, Mr Urdangarin's spokesman and lawyer, Mario Pascual Vives, has made just one comment to the press: that he will no longer be talking to them in an attempt to extinguish what he called "media pyrotechnics".

Royal connections: Urdangarin's rise

Affable and handsome, Iñaki Urdangarin was one of the most popular members of the royal family. Born in 1968 to a Basque family, he became Duke of Palma when he married the King's second child, Princess Cristina, in Barcelona in 1997. The couple met at the 1996 Olympic Games where he was a member of the Spanish handball team. He retired from sport in 2000 and set up the not-for-profit Noos Institute. They now live in Washington DC, where he works for Telefonica.

Jenny Stevens