A lawyer for the king of Spain's son-in-law denied media reports that he is negotiating a plea bargain for his client with prosecutors over a corruption case that is making the monarchy look terrible at a time when everyday people are enduring acute economic woes.

Inaki Urdangarin, the 44-year-old in-law, has not been charged with a crime. But he has been named a formal criminal suspect and has undergone questioning by a judge in Palma on the Mediterranean island of Mallorca. Urdangarin is the husband of King Juan Carlos and Queen Sofia's second daughter, Princess Cristina.

Urdangarin allegedly received (EURO)6 million ($7.9 million) in public money from 2004 to 2006 from regional governments in Mallorca and Valencia for arranging conferences through a nonprofit foundation he ran with a partner, then funneled it to for-profit companies they controlled.

Major Spanish newspapers including El Pais and El Mundo reported Tuesday that Urdangarin and the ex-partner are negotiating to admit guilt, return ill-gotten money, pay a big fine and avert jail.

But Urdangarin's attorney, Mario Pascual Vives, said Wednesday he himself has not been in contact with prosecutors over any such deal.

"In my capacity as lawyer for Mr. Urdangarin, neither formally nor informally have I been in any kind of contact with prosecutors, nor their honorable representatives in Palma de Mallorca, with regard to any kind of agreement or deal," the attorney told reporters in Barcelona.

Under the plea deal described in the media reports, Urdangarin would agree to plead guilty on condition prosecutors not seek a jail term of more than two years. The length of any sentence is key because first-time offenders in Spain _ Urdangarin has no criminal record _ who are convicted of a crime and sentenced to two years or less automatically receive a suspended sentence. So Urdangarin would not go to jail.

Urdangarin and ex-partner Diego Torres _ who once taught him at an exclusive MBA program in Barcelona _ could face embezzlement charges, which can carry a jail term of three to six years.

El Pais and El Mundo say Torres is seeking a similar arrangement. His lawyer, Manuel Gonzalez Peeters, did not return a call seeking comment. Continued...