Updated

Rome's mayor has suffered another embarrassing setback after financial police searched City Hall and seized records about disputed appointments.

The searches came days after Mayor Virginia Raggi's top environmental adviser resigned after prosecutors revealed she was under investigation.

Raggi said during a news conference on Thursday that City Hall was fully cooperating with prosecutors and had nothing to hide. She calls the case "ridiculous" and has said political mud-slinging was responsible.

Raggi is the highest-profile office-holder from the populist 5-Star Movement, and came to power promising to clean up the Eternal City following corruption scandals and deteriorating public services.

But she has floundered in her first six months in office, with a series of problematic appointments and resignations.

Five-Star founder Beppe Grillo was in Rome but did not comment.