first major scandal to hit a member of Juan Carlos' family, judges are investigating alleged corruption involving a charitable organisation formerly run by Inaki Urdangarin, 43, the Duke of Palma de Mallorca.

Spain's King Juan Carlos has censured "irregular conduct" by public officials in his annual Christmas message, in a tacit reference to a corruption scandal facing his son-in-law.

"I am enormously worried by the lack of trust that seems to be spreading in some sectors of public opinion with regard to the credibility and prestige of some of our institutions," the King, 73, said in his televised address.

"All, absolutely all people with public responsibilities, have a duty to observe appropriate conduct," he added in the address, broadcast on Saturday evening.

In the first major scandal to hit a member of Juan Carlos' family, judges are investigating alleged corruption involving a charitable organisation formerly run by Inaki Urdangarin, 43, the Duke of Palma de Mallorca.

Urdangarin, a former Olympic handball player, is married to the King's youngest daughter, Princess Cristina.

The royal palace this month froze Urdangarin out of its official activities.

"When there is irregular conduct that is not legal or ethical, it is natural that society reacts," the King said.

"Any reprehensible action must be judged and sanctioned according to the law. Justice is equal for all."

He also called for Spain to unite to pull through its economic hardship, with the unemployment rate at 21.5 percent -- a level he called "unacceptable".

"We all know that the path of recovery with not be short nor easy, that it will require sacrifices," he said. "It is a crisis that is surely set to change our economic and social habits."

Following an announcement in October by the Basque separatist group ETA that it was ending its armed activity, Juan Carlos called on it to follow through by formally surrendering its arms and disbanding.