TBILISI: Georgian investigators on Saturday charged Tbilisi mayor Gigi Ugulava with misspending state funds and money laundering, in the latest legal case against a close ally of President Mikheil Saakashvili.

The filing of the charges against the charismatic Ugulava -- seen as the president's closest ally -- is the latest twist in a growing confrontation between Saakashvili and Prime Minister Bidzina Ivanishvili.

The move to prosecute Ugulava caps months of tensions after the president's United National Movement (UNM) party lost legislative elections to Ivanishvili's coalition last October.

Ugulava was summoned by the finance ministry's investigations service and charged with "misspending state funds and legalisation of illegal income," the ministry said in a statement.

Ugulava denied any wrongdoing and dismissed the charges as "absurd" and politically motivated.

"I am ready to face trial, I am ready to prove my innocence," he told applauding supporters before entering the finance ministry building.

Several former top Saakashvili officials have been arrested and hundreds of UNM supporters interrogated over the last three months for alleged wrongdoing, prompting warnings from top European diplomats over selective justice and persecution of political opponents.