Thousands of people in Madrid have demonstrated against the Spanish monarchy, demanding the return of a democratically-elected head of state, in another blow for King Juan Carlos.

The march went through the centre of the Spanish capital on Sunday, which marked the 82nd anniversary of the establishment of Spain's last democratically-elected republic.

The republic was overthrown by an army uprising that led to a civil war and the 36-year military dictatorship of General Francisco Franco.

Franco appointed then Prince Juan Carlos as his successor as head of state, a job the royal took over as king upon the dictator's death in 1975.

The monarchy's popularity has slumped in recent months, with the 75-year-old king being criticised for going on a luxurious safari during Spain's financial crisis and a corruption scandal with links to royal family members.

"This monarchy was imposed on us by the dictatorship, therefore we consider it to be illegal,'' 45-year-old teacher Maria Ayuso said.

Criticism of the king, who oversaw Spain’s transition from dictatorship into a modern democracy, has increased in the past year after he broke his hip on an elephant-hunting trip in Botswana even though he was president of the Spanish branch of the World Wildlife Fund.

The king had to be flown back to Spain aboard a private jet for hospital treatment.

In an unprecedented act of royal contrition, Juan Carlos apologised, saying as he left the hospital: "I am very sorry. I made a mistake. It won't happen again.''

The king lost even more support when his daughter, Princess Cristina, was named as an official suspect in an alleged plot to embezzle public money.

The investigation centres on whether the 47-year-old princess' husband, Inaki Urdangarin, and his former business partner took advantage with her knowledge of their royal connections to funnel about 5 million euros in public funds, using companies and an allegedly non-profit institute they ran.

Neither Cristina nor Urdangarin have been charged, but both have been called to testify before an investigating magistrate.

Source: Agencies