Omri Sharon, a Likud Party lawmaker and key adviser to his father, had previously said he would argue in his defence.

He was accused on Tuesday of fraud, breach of trust and perjury - charges carrying a maximum sentence of seven years in prison.

Although no charges were brought against the prime minister over the case, the scandal has embarrassed him at a time when he faces tough political battles.

Allegations that shell companies were set up to funnel foreign donations to Ariel Sharon's successful 1999 race for the right-wing Likud party leadership fuelled political opposition to the prime minister.

Illegal funding

Foreign funding of political campaigns is illegal in Israel.

The scandal has embarrassed 
Sharon at a fragile political time

Sharon had denied any wrongdoing in the funding case, saying his two sons alone handled financing for his 1999 primary campaign.

Attorney-General Menachem Mazuz decided in February against indicting the prime minister, citing lack of evidence after a three-year investigation.

Related charges against two of Sharon's former senior advisers were dropped.
 
Sharon is expected to face early elections next year as a surprise leadership change in the Labour party, a key partner, has brought his ruling coalition to the verge of collapse.

Elections are due in November 2006.