Russian opposition leader and anti-corruption blogger Alexei Navalny has been accused of receiving illegal funds for his Moscow mayoral election campaign.

Navalny, 37, who is appealing against a jail sentence for embezzlement in a widely controversial verdict, is an outspoken critic of President Vladimir Putin.

Russia's Prosecutor General's office said in a statement that "a check has confirmed information about foreign financing of Alexei Navalny".

It alleged that more than 300 anonymous foreign and anonymous donors from 46 countries, including the US, the UK, Finland, Switzerland and Canada, gave money to Navalny using Yandex Money, a Russia-based internet payment system.

The probe was launched by prosecutors after nationalist politician Vladimir Zhirinovsky and Putin's United Russia party raised suspicion about Navalny's election campaign.

The blogger's campaign chief Leonid Volkov said that the campaign account "has not received a single donation from a foreign individual".

Navalny denied the allegations, claiming that the prosecutor made up the case.

"It is absolutely clear to us why this happened: All polls now suggest that a runoff election is practically inevitable," Navalny said in a telephone interview with Dozhd TV in Moscow.

"We understand that the Kremlin and [acting Moscow Mayor Sergei] Sobyanin are in panic and they fear a runoff election, so it was just a matter of what kind of reason they would cook up to start yet another wave of negative news on national television."

The opposition leader said that millions of Russians are abroad on holiday and Internet users inside the country use foreign IP addresses to fund his campaign.

Yandex Money confirmed that Russian citizens can legally make payments while on holiday overseas.

The Kremlin critic was convicted of embezzlement last month and faces a five-year jail term. He was released from prison the next day to allow him to stand in the mayoral race.

Sobyanin, appointed by the Kremlin, is expected to win the Moscow election, controlling a city budget of more than $50 billion, in the 8 September polls.

In a blog post last week, Navalny questioned how Sobyanin's teenage daughter could afford to own a $5.27 million Moscow apartment.