Spain's prime minister Mariano Rajoy has refuted corruption claims levelled against him by his party's former treasurer Luis Barcenas, saying the accuser is a liar and "a delinquent".

Rajoy, 58, appeared before parliament in Madrid to answer calls for him to resign, over claims he received tens of thousands of euros in cash from a slush fund held by Barcenas on behalf of the ruling Popular Party (PP).

Rajoy admitted to lawmakers he "was wrong to maintain confidence in someone we now know did not deserve it".

However, he said only Barcenas is to blame and denied any wrongdoing by himself and the PP.

"Justice will prove that I and my party have done nothing illegal," Rajoy said.

The PM accused his political opponents of fuelling the scandal with "lies, manipulation and malicious insinuations" for political gain.

Opposition leader Alfredo Perez Rubalcaba called for him to step down as his party conduct was damaging Spanish institutions and he won elections thanks to a system of illegal financing.

"You must go, Mr Rajoy," he said. The PM however, remained unmoved by the attacks.

"Nothing related to this matter has prevented me, nor will it prevent me from governing," he said.

Barcenas, PP's party treasurer for 20 years, is in jail awaiting trial for tax fraud and money-laundering.

He was arrested in June over allegations that he stashed up to €48m euros in secret Swiss bank accounts.

At first the treasurer denied the allegations but then started cooperating with authorities and accusing his fellow party members.

Earlier this month, Barcenas reportedly told Madrid judges that he gave Rajoy more than €45,000 (£34,500) in cash between 2009 and 2010 and handed similar amounts to party secretary-general Maria Delores de Cospedal.

Barcenas said the cash had come from payments made by businessmen and construction companies to the PP in exchange for favours and contracts.