Spain's acting Industry Minister Jose Manuel Soria said on Friday he was resigning with immediate effect after alleged links to offshore dealings which emerged after he was named in the Panama Papers.

Soria has denied all wrongdoing, but said he was stepping down to limit any damage to the caretaker government, the People's Party (PP), following revelations of alleged links to an offshore company in the British island of Jersey.

The resignation comes at a time when Spain is facing the likelihood of a second general election in June after an inconclusive December vote.

The latest polls have shown the PP gaining ground, despite a string of corruption scandals involving regional politicians this year, as voters tire of left-wing parties' failure to put aside differences to form a coalition government.

Leaks from the Panama-based law firm Mossack Fonseca have embarrassed several world leaders and shone a spotlight on the shadowy world of offshore companies by revealing the financial arrangements of prominent figures.

Icelandic Prime Minister Sigmundur David Gunnlaugsson stepped down earlier this month after documents linked him to an offshore company.

Acting industry minister Soria denied his involvement in an offshore company revealed by the Panama Papers after two Spanish news outlets said they had documents proving he headed an offshore firm with his brother.