The Israeli Prime Minister Ariel Sharon who is embroiled in a funding scandal that has cut into his Likud party's lead ahead of Israel's general election has denied any wrongdoing and said he has nothing to hide.
A corruption scandal linked to Sharon and his family has turned the campaign for the January 28 election into an open race after polls showed support for his front-running Likud party plummeting.
"I have nothing to hide," the right-wing prime minister told reporters in his office in an appearance carried live on Israeli television stations on Thursday. "I will continue to behave as I have until today."
Sharon said there was no evidence of bribery in the Likud funding case and that one of his adult sons had documents to prove that everything was done legally.
The prime minister lashed out at the opposition Labour Party, accusing it "for the sake of politics" of having a role in a recent series of allegations of Likud corruption.
The scandal focuses on funding irregularities in Sharon's 1999 Likud election campaign and includes accusations of wrongdoing over a $1.5 million loan from South African businessman, Cyril Kern. Israeli law bans political funding from abroad.
The money, according to the reports, was put up as collateral for a loan used to cover the return of illegal campaign funds, which Sharon had told police he paid back by taking out a mortgage on his ranch.
Kern told Reuters that Sharon was an old friend and that he loaned the money to the prime minister's two adult children. He said the loan had been repaid in full with interest.
"I've known Ariel 54 years. We're very close friends and we see one another continuously," Kern told Reuters from the Cape Town office of his company.
The scandal has fired up a lacklustre campaign in the run-up to voting in which opinion polls had originally forecast the right-wing Likud would crush its main opponent, the centre-left Labour Party led by dovish Haifa mayor Amram Mitzna.
Support for Likud began dropping after allegations surfaced last month that party members paid bribes for votes in a December primary.
According to newspaper reports, several people backed by underworld figures won places then on the party's list of candidates for parliament.