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By Marton Dunai

BUDAPEST (Reuters) - Hungarian prosecutors said on Friday they had launched an investigation into the financial reporting practices of the main opposition party, Jobbik, prompting a furious accusation of political bias from the radical nationalist party.

Political tensions are rising in Hungary ahead of an April 2018 parliamentary election, in which Prime Minister Viktor Orban's ruling conservative Fidesz party is expected to defy the challenge from Jobbik and win a fresh four-year mandate.

The State Audit Office (ASZ) requires all parliamentary parties to report on their finances, and has made routine biannual checks at half a dozen opposition parties for 2015 and 2016.

But ASZ, which is headed by former Fidesz lawmaker Laszlo Domokos, has also asked Jobbik to provide paperwork for the first half of 2017.

ASZ spokesman Balint Horvath told Reuters it made that decision after receiving reports of possible financial irregularities behind a spring poster campaign conducted by Jobbik.

In its ad campaign Jobbik accused Orban and some of his associates of corruption, using the advertising space of Lajos Simicska, an estranged key Orban ally. Both the party and Simicska have declined to say how much Jobbik paid for the ads.

Jobbik, which denies any financial impropriety, said it had agreed to let ASZ check its books for this year. But it said the inspectors had visited its office when it was shut and had then promptly asked the prosecutors to get involved.

"Only stinking third-world dictatorships use nominally independent authorities, actually subordinated to party politics and a thieving government, to neuter the main opposition force, which in Hungary is Jobbik," said party vice-chairman Janos Volner.

ASZ said Volner's comment was "a politically motivated attack on our independence".

Hungary's chief prosecutor, Peter Polt, is also a former Fidesz member who was twice appointed to his post by Fidesz-dominated parliaments.

Jobbik, which has somewhat modified its right-wing, anti-immigrant rhetoric in recent years, is expected to come second in next year's election, after Orban's Fidesz but ahead of the centre-left Socialists.

(Reporting by Marton Dunai; Editing by Gareth Jones)

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