MARIANO Rajoy’s People’s Party (PP) was reeling yesterday after Spain’s National Court handed down prison sentences of more than 350 years to politicians and business people involved in a kickbacks-for-contracts scheme that helped fund it.

The court ruling is a major blow for the PP, which was fined €245,000 (£218,700) because it benefited from the corrupt scheme that was in place between 1999 and 2005. It was the first such conviction for a Spanish political party.

A panel of three judges also fined a former health minister who accepted gifts as part of one of the biggest corruption scandals in the country’s modern history.

Rajoy, who last year became the first Spanish prime minister in office to testify in court, had said he was not aware of the party’s accounting practices when the illegal funding scheme was in place – but he was the PP’s vice-secretary general and then secretary general until 2004.

The case was known as the “Gurtel” plot – the German word for belt, for which the Spanish word is correa – surname of its mastermind and ringleader businessman Francisco Correa, who was jailed for almost 52 years.

Luis Barcenas, the party’s accountant for three decades and a PP senator, was jailed for 33 years and fined more than €44 million (£38m).

Another businessman and key aide to Correa, Pablo Crespo, was sentenced to 37 years.

Altogether, 29 of 37 defendants in the case were convicted for tax evasion, fraud, money laundering, misuse of public funds and abuse of power, among other crimes.

In a ruling running to nearly 1700 pages, the court acquitted eight defendants, although one of the three judges said that four more should be acquitted and voted against convicting PP as a scheme beneficiary.

Correa, 62, was found guilty of controlling the network of aides and companies that arranged travel and organised events for PP in exchange for public contracts.

Barcenas, who resigned as party treasurer in 2009 but kept his Senate seat for another year and an office in the PP headquarters until 2013, admitted that he kept the illegal party funding hidden and said that top officials were aware of the illegal contributions – claims the PP denied.

Rajoy said he never met Correa and that it was he who ordered a halt to contracts with his companies when he learned they were misusing the conservative party’s name.

The case is part of a wider probe looking into allegations that high-ranking PP officials allegedly received illegal bonuses administered by Barcenas. Rajoy has said the allegations are “absolutely false”.

He was returned to power in 2011, but his minority government is under threat from the lengthy conflict over Catalan independence.

Less than an hour before sentences were passed in the case, Spanish media began reporting an early-morning operation in Barcelona where Guardia Civil officers raided the provincial council offices and arrested more than 20 people, including its former president.

Judicial sources said the raids followed a year-long investigation into a network that appeared to be not dissimilar to Gurtel. Pro-independence politicians, however, said it was a “smokescreen” to divert attention from the corruption verdicts.