Spain's Inaki Urdangarin, the son-in-law of Spain's King Juan Carlos and Queen Sofia
Spain's Inaki Urdangarin, right (Reuters)

Spanish King Juan Carlos' son-in-law Inaki Urdangarin has been charged with corruption and will appear in court as a suspect in a fraud scandal that is threatening the crown's popularity.

Urdangarin, the Duke of Palma and husband to Cristina, youngest daughter of the king, is the key figure in an investigation into misappropriation of public funds through a non-governmental organisation he managed.

A former Olympic medal-winning champion, part-Basque Urdangarin married Cristina in 1997. The couple have four children.

In 2004, he became president of the Noos Institute, a non-profit organisation which organised sporting and tourism events in the Balearic Islands and Valencia.

But prosecutors discovered a financial black hole of millions of euros and alleged fraudulent activities that included the presentation of fictitious tax receipts.

The institute allegedly diverted public funds into a network of private companies owned by Urdangarin.

According to Publico newspaper, at least €3.2 million out of €5 million were passed on from Noos to Urdangarin's private companies.

Prosecutors claim that Noos inflated its bills to 170 percent of their actual cost.

Urdangarin denies the charges.The case opens on 6 February.

"When I know the details of the investigations being carried out I will be able to comment on their contents," he said. "My professional behaviour has always been correct."