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Spain princess fights fraud accusations in court

Spain's princess Cristina distanced herself from fraud accusations during a tough court hearing over a scandal that has plunged the royal family into crisis.

PALMA, Spain: Spain's princess Cristina distanced herself from fraud accusations during a tough court hearing on Saturday over a scandal that has plunged the royal family into crisis.

Dressed in a white shirt and black jacket, King Juan Carlos's youngest daughter nodded to reporters as she left the court in Palma on the holiday island of Majorca after being questioned for seven hours.

Cristina was questioned over allegations that she was complicit in tax-dodging and money laundering in a courtroom overlooked by a portrait of her own father, Juan Carlos, 76, who is the head of state.

Long thought untouchable as a royal, Cristina, 48, is in the centre of the scandal over allegedly fraudulent business dealings by her husband, former Olympic handball player Inaki Urdangarin.

"Justice works. The princess has demonstrated that we are all equal under the law," one of her lawyers, Miquel Roca, told reporters after the closed-door hearing ended.

Cristina is the first direct member of the Spanish royal family in history to appear in a court as a suspect.

"Everything has been cleared. The questioning has shown how the princess is innocent of all the accusations made against her," another of her lawyers, Jesus Maria Silva, told reporters.

The hearing follows more than two years of mounting anger against the elite in a Spain battered by recession.

Near the court on a sunny winter's day, scores of pro-republican protesters rallied, held back by police barriers.

They waved red, yellow and purple republican flags and banners with slogans such as "Royal blood = unreal justice" or "Heads of state by the ballot, not the cradle".

"It seems the privileges they have aren't enough for them - they have to do something that really annoys the people," said Mateo Castellanos, 61, who travelled hundreds of miles from the mainland to protest.

"A large part of the country is suffering hardship and a lot of people don't have enough to feed their children."

Majorca, where for decades Cristina's family sunbathed and sailed yachts in the summer, is now the centre of a scandal that has turned much of the public against them and raised doubts over the very future of the monarchy.

Neither Cristina nor her husband has been formally charged with any crime and both deny wrongdoing.

One of the prosecuting lawyers in the courtroom told reporters she sought to side-step the accusations by telling the judge she had simply "had great trust in her husband".

"Ninety-five percent of her answers are evasive," said Manuel Delgado, a lawyer for a civil party in the case, left-wing association Frente Civico.

Delgado said the princess responded to most questions with "I don't know, I am not aware, my husband was responsible for that".

Judge Jose Castro has spent more than two years investigating allegations that Urdangarin and a now-estranged former business partner embezzled six million euros (US$8 million) in public funds via a charitable foundation. Cristina was a member of the foundation's board

Onlookers applauded as he left the court on his motorcycle.

Cristina and her husband jointly owned another company, Aizoon, which investigators suspect served as a front for laundering embezzled money.

King Juan Carlos won widespread respect for helping steer Spain to democracy after the death of the dictator Francisco Franco in 1975.

But the royals' popularity has plunged since the case against Urdangarin opened three years ago, polls have shown.

The king's woes were worsened by a luxury elephant-hunting trip he made to Africa in 2012 as his subjects suffered in a recession.

The sight of the king looking frail on crutches in his rare public appearances has fuelled speculation over whether he may abdicate in favour of his son and heir Felipe, 46.

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