Testifying in court, Luis Barcenas, who served as party treasurer from 1990 to 2009, said he had handed out envelopes of cash to a number of top PP officials, including Rajoy, Spain’s prime minister until 2018, and Jose Maria Aznar, who served as premier from 1996-2004.

The case centres on a system of parallel bookkeeping used by the PP to manage undeclared funds that was run by Barcenas, which for two decades was fed by donations from businessmen and paid bonuses to PP leaders and collaborators.

“I gave them an envelope containing the amount they were owed,” he told the court on Monday, identifying the recipients as eight senior PP figures, among them Rajoy and Aznar.

Barcenas said the payments were made after Rajoy and others entered Aznar’s cabinet in the 1990s to ensure their salary levels did not drop below a certain level.

Previously, they took home their MP salary and were also paid for representing the party, but such an arrangement is illegal for government ministers.

No courtroom confrontation

Rajoy, who has always denied any knowledge of the system, will appear as a witness at the trial which will run until May at a branch of the National Court just outside Madrid.

But the court on Monday ruled out any chance of a face-to-face confrontation between the two men.

Barcenas has accused Rajoy, who was opposition leader at the time, of being “perfectly aware” of the arrangement, saying he showed him the slush fund accounting papers.

Rajoy then destroyed them “in a paper shredder without knowing I’d kept a copy”, Barcenas wrote in a letter to the prosecution just days before the trial opened on February 8.

The alleged slush fund, which was fed by corporate cash donations, was also used for the renovation of the party’s Madrid headquarters, Barcenas has said.

Details of the accounts emerged in the so-called “Barcenas papers” which were first published by El Pais newspaper in 2013.

Barcenas himself is currently serving a 29-year sentence over the so-called Gurtel case which centred on a vast system of bribes given to former PP officials in exchange for juicy public contracts between 1999 and 2005.