King Juan Carlos' son-in-law will stop taking part in official ceremonies because his business dealings are under investigation

King Juan Carlos' son-in-law will stop taking part in official ceremonies because his business dealings are under investigation, Spain's Royal Palace said today.

Inaki Urdangarin, 43, is suspected of siphoning away funds from public contracts awarded from 2004 to 2006 to a non-profit foundation he then headed.

The allegation looks terrible for the royal family at a time of acute hardship and economic crisis in Spain, where unemployment stands at 21.5 per cent.

Mr Urdangarin, husband of the monarch's daughter Princess Cristina, made the decision mutually with the Royal Palace, according to its chief of staff.

He has not been charged with a crime and issued a statement on Saturday saying he regrets the 'damage' the case is causing the royal family, but admitted no wrongdoing.

Rafael Spottorno, chief of staff at the palace, said Mr Urdangarin will be removed from the royal family's agenda and will no longer attend official ceremonies involving it.

He said it was not yet known if Princess Cristina would also stay away from activities.


Ceremony: Mr Urdangarin, far right, stands with (from left) Princess Letizia Ortiz, Crown Prince Felipe, King Juan Carlos, Queen Sofia, and his wife Princes Cristina


Duties: Princess Cristina at the World Swimming Championships in Barcelona in 2003. She lives with her husband in Washington D.C.

The couple and their four children now live in Washington, D.C., where Mr Urdangarin works for Spanish telecommunications company Telefonica.

Spanish newspapers, quoting investigators, have reported that he is suspected of taking part of around €6million the foundation received from regional governments in Valencia and the Balearic Islands for organising events such as sports seminars.

The money is said to have gone to for-profit companies he ran.

The case is part of a broader, long-running corruption probe involving the regional government in the Balearic Islands, the capital of which is Palma on the island of Mallorca.

News of the scandal has made the front page of Spanish newspapers for the past two weeks and forced the Royal Palace to take the rare step of addressing publicly the activities of one of its members.

Mr Spottorno said that by the end of December, the Royal Palace website will publish a breakdown of the money earmarked for the family in the government budget. In 2011, it was €8.43million.

King Juan Carlos and Queen Sofia have three children.

Crown Prince Felipe is the youngest, Princess Cristina in the middle child and the eldest is Princess Elena.