Spain's ruling conservatives have been found guilty of benefiting from illegal funds in a mega graft trial in which 29 former officials, businessmen and their spouses were also jailed.

The National Court said it had uncovered a vast system of bribes given to former Popular Party (PP) officials in exchange for juicy public contracts between 1999 and 2005 in various regions including Madrid.

In a statement, the court said a total of 29 people had been handed jail sentences, for a total of 351 years, for corruption, embezzlement and money laundering in the so-called "Gurtel trial," named after the code name of the police investigation.

The PP itself was not on trial for direct involvement in the scheme but was found to have benefited from funds obtained illegally. It is the first time that a ruling party in Spain has been found guilty in court, and the PP was ordered to pay back 245,000 euros. The PP said it would appeal the sentence.

Prime Minister Mariano Rajoy downplayed the extent of corruption within his party. "It's obvious that the PP is more than just 10 or 15 isolated cases," he told Spanish radio, acknowledging however the case "damaged" the party he has presided over for 14 years.

Among those sentenced individually was Luis Barcenas, a former PP treasurer who was handed 33 years and four months in prison and a 44-million-euro fine.

The court also confirmed the existence of a "slush fund" within the PP, "a financial and accounting structure parallel to the official one that had existed at least since 1989" which is the subject of another pending trial.

The "Gurtel" case has long been a thorn in the side of the PP, which lost its absolute majority in parliament in 2015 partly because of the repeated corruption scandals. The sentencing comes in the same week that Eduardo Zaplano, a former PP minister, was detained for alleged graft when he was president of the eastern Valencia region.

It also comes close on the heels of another court announcement that Jose Enrique Fernandez de Moya, the deputy to Spain's budget minister, would be questioned by a judge over alleged misfeasance and misuse of public funds when he was mayor of the southern city of Jaen.

Of the 29 who were handed jail in the Gurtel mega-trial, businessman Francisco Correa, the leader of the graft network, was sentenced to 51 years in prison. Barcenas, who was the PP's treasurer between 2008 and 2009, was allegedly in charge of the party's slush fund and was suspected of having hidden millions of euros in Switzerland. Rajoy famously sent him a text message when Barcenas was being investigated saying: "Luis, be strong."

A total of 37 people were in the dock in the trial that lasted from October 2016 to November 2017, but some of those were acquitted. During the trial Rajoy was forced to appear as a witness, becoming the first acting prime minister to do so since Spain's transition to democracy following dictator Francisco Franco's death in 1975. He told the court he had "never dealt with party financial matters."

The PP, rival Socialists and regional politicians have all been hit by corruption scandals. Such is public anger over the issue that many voters have flocked to two relatively new parties – the far-left Podemos and the center-right Ciudadanos.

(With input from agencies)