As a result, the way has been opened for the trial of the main suspect in the case. He is Luis Barcenas, former treasurer of the party and a political ally of conservative prime minister Mariano Rajoy.
Investigating judge Pablo Ruz gathered evidence that the party “from 1990 to at least 2008 drew on various sources of funding outside of the legal economic sphere”, his tribunal said in a statement.
“This allowed it to function, at least during the 18 years under investigation, with various systems of accounts which registered deposits and withdrawals of money outside of the official accounts declared” to financial authorities.
Ruz called for Barcenas to stand trial on charges of tax fraud and embezzlement and referred the case to state prosecutors.
The judge also called for five other suspects to stand trial, including another former PP treasurer and members of a construction firm, Unifica. Charges against 22 others were dropped.
A judicial investigation, originated in 2009, looked into alleged kickbacks involving party members and construction companies.
The scandal first came to wide attention in 2013 when the leading paper El Pais published copies of account ledgers which allegedly showed irregular payments to senior party members.
In July 2013 Barcenas testified in court that he handed money to Rajoy. The prime minister and other top party leaders denied receiving any undeclared payments.
The events have been unfolding at a difficult time for the ruling party. While the economy is picking up, unemployment rates are disastrous and Spanish people are suffering from rigid austerity measures.
Local and regional elections are coming up around the country, with the first being last Sunday in Anadalusia. The process will culminate in general elections in November.
The new parties, Podemos and Ciudadanos, are eagerly trying to gain voter confidence with their promises to fight corruption.
Rajoy apologised in parliament in October 2014 for another scandal over an alleged kickback scheme implicating members of his party.
Separately, another PP stalwart, former International Monetary Fund head Rodrigo Rato, is being investigated by the court over alleged fraud.
