"I apologise to the citizens," Sanchez said.
He said the new revelations filled him with "great indignation and deep sadness".
The 53-year-old announced an external audit of the finances of his Socialist Workers’ Party, PSOE, and also a reorganisation of the party executive.
Earlier yesterday the party’s number three, Santos Cerdan, resigned as secretary due to his alleged involvement in a corruption scandal.
Cerdan also announced that he would be giving up his seat as a member of parliament.
According to a report by the UCO police unit responsible for corruption offences, he allegedly received bribes over the awarding of public contracts.
However, the 56-year-old has maintained his innocence.
Various corruption scandals have plagued Spain’s left-wing minority government which has been in power for seven years.
Former transport minister Jose Luis Abalos and his family are among those under investigation.
The revelations are likely to provide further ammunition to the Spanish opposition, which has condemned cronyism and corruption within the PSOE and Sanchez’s family.
Conservative People’s Party leader Alberto Nunez Feijoo called for elections on Monday at a protest rally against the government attended by tens of thousands of people in Madrid. — DPA
