The new party, Sortu, is considered an extension of ETA's outlawed political branch, Batasuna, and rejected the use of violence in its charter to comply with Spain's Party Law.
But police reports indicate Sortu candidates are former Batasuna members and keep a bank account to provide financial assistance to jailed ETA members, El Pais reported Monday.
Prime Minister Jose Luis Rodriguez Zapatero said Sortu cannot be legal unless ETA is dissolved.
The radical separatists have opted to put up candidates with no police records, and registering under another pro-independence party, Eusko Alkartasuna, which has no direct ties to ETA.
"One way or another, we're going to be in those elections," said a source close to those involved.
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