By Sonya Dowsett
MADRID, May 7 (Reuters) - A Spanish court on Tuesday suspended corruption charges brought against King Juan Carlos's daughter, saying there was not sufficient evidence that Princess Cristina had been an accomplice in an embezzlement case involving her husband.
When Cristina, 47, was charged last month, it was the first time a member of the royal family had been the subject of criminal proceedings since the monarchy was reinstated in the 1970s.
Tuesday's ruling by the High Court on the island of Mallorca overturned an earlier judgment by the examining magistrate of a lower court, although the charges could be reinstated if new evidence is found, the High Court said.
The case has deepened public discontent with the royal family and with a growing number of cases of graft among the rich and powerful while ordinary Spaniards struggle with 27 percent unemployment and a long-running recession.
Ricardo Sixto, member of parliament for the opposition United Left party, said: "If it had been any other citizen, the charges would have held and she would have had to appear in court."
But the ruling People's Party (PP) - three of whose former treasurers have been charged with crimes ranging from bribery to money laundering and tax evasion - had said previously that the charges against the princess were bad for Spain's image.
PP spokesman Alfonso Alonso expressed relief on Tuesday that they had been dropped, saying: "It's good news all round."
The lower court magistrate, Jose Castro, had said there was evidence the princess had aided and abetted or at least been complicit with her husband, Inaki Urdangarin, a former Olympic handball player accused of using his connections to win public contracts to stage events on Mallorca and elsewhere in Spain.
He has been charged with fraud, tax evasion, falsifying documents and embezzlement of 6 million euros ($8 million) in public funds when he headed a charitable foundation, but has denied any wrongdoing.
Cristina had been due to appear in court on April 27, but the hearing had been delayed pending the Mallorca High Court's ruling, after prosecutors appealed against the charges.
In Spain's legal system, examining magistrates and prosecutors both investigate cases, and may have differing views. ($1 = 0.7659 euros) (Additional reporting by Edgar Aribau; Editing by Fiona Ortiz and Mark Heinrich)
Spanish Court Drops Princess Cristina Corruption Charges, Could Still Call Her In For More Questioning