Spain's prime minister says an investigation into an ex-minister and former International Monetary Fund chief over alleged fraud and money laundering is damaging his party, which faces a general election late this year.

Mariano Rajoy said Saturday the probe into Rodrigo Rato "particularly affects the Popular Party" because the former minister "has been one of our most important assets."

Rato, who was detained briefly as police searched his home and offices, served as economy minister and deputy prime minister under conservative ex-Prime Minister Jose Maria Aznar between 1996 and 2004, and had been seen as a possible successor to Aznar.

Rato headed the IMF from 2004 to 2007.

Late Friday, as protesters gathered outside the PP's Madrid headquarters, Spain's prosecutor ordered Rato's bank accounts blocked.