Malta's Prime Minister Joseph Muscat, right, welcomes European Council Donald Tusk | Matthew Mirabelli/AFP via Getty Images Joseph Muscat: Graft allegation ‘greatest lie in Malta’s political history’ Island nation rocked by allegations involving prime minister’s wife.

Maltese Prime Minister Joseph Muscat has called for an investigation into allegations that his wife received $1 million from the daughter of Azerbaijan's president through a company set up by Mossack Fonseca, the law firm at the heart of the Panama Papers scandal.

The accusation, made by controversial blogger Daphne Caruana Galizia, triggered a political firestorm in the EU's smallest country, whose Labour government currently holds the rotating presidency of the Council of the EU.

The opposition Nationalist Party, whose leader has called for Muscat's resignation, is planning a major protest in the capital Valletta on Sunday.

"In front of the Maltese public, I swear, I categorically deny I had, or have, any type of undeclared account or company in Malta or overseas," Muscat said at a press conference late Thursday, describing the allegation as "the greatest lie in Malta's political history."

The allegation is "an outright lie," Muscat's spokesman, Kurt Farrugia, told POLITICO. "No shred of evidence was brought forward. We might be witnessing the biggest frame-up in local politics ever."

Caruana Galizia is now under pressure to publish the documents on which she based her claims, which she says prove that Michelle Muscat is the beneficial owner of Egrant, a company opened by Mossack Fonseca, and that she received money through the company from the daughter of Azerbaijan's president, Ilham Aliyev.

"Daphne: your words and writing are not enough. Publish all the documentation as soon as possible to substantiate your words," wrote Arnold Cassola, the leader of Alternattiva Demokratika, Malta's Green party.

Muscat said Friday he was taking legal action against Caruana Galizia.

Late Thursday, one of the chairmen of Pilatus Bank, which according to Caruana Galizia orchestrated the transactions involving Muscat's wife, was filmed leaving the bank through an emergency exit carrying suitcases.

The bank, which was raided by police Friday morning, has rejected all the allegations made by the blogger, saying it had no dealings with any member of the Muscat family or with companies set up by Mossack Fonseca.

Simon Busuttil, leader of the Nationalist Party, said he feared the documents cited by Caruana Galizia had been taken out of the country and expressed frustration that police had not sealed the building before the bank's chairman left.

The police commissioner, who was appointed by the government last year after his predecessor resigned because of ill health in the wake of the Panama Papers scandal, said he couldn't launch an investigation without having the documents in question.

Opposition politicians allege Muscat and the two aides took kickbacks from companies involved in privatization deals.

Jason Azzopardi, shadow justice minister, said Busuttil had asked Muscat "on the eve of Malta assuming the EU presidency, not to allow our country's reputation to be sullied" but the prime minister "chose his loyalty towards his aides above that towards his oath of office.

"We now have, probably for the first time in the EU's history, and certainly for the first time in Malta's history, the prime minister of the country holding the EU presidency being under formal judicial investigation for potential money laundering and international corruption. Can it get any worse than this?"

The allegations pile more pressure on Malta's prime minister, who has been accused by opposition politicians of protecting his close allies Konrad Mizzi, the energy minister, and Keith Schembri, his chief of staff, who were both named in the Panama Papers scandal last year.

Opposition politicians allege Muscat and the two aides took kickbacks from companies involved in privatization deals, including SOCAR, Azerbaijan's state-owned oil company. They have consistently denied all wrongdoing.

This article has been updated to remove a reference to a Pilatus Bank chairman leaving Malta.