Once a symbol of Spain's financial crisis, Bankia had evolved into a sign of the country's recovery after returning to profit in 2013. The state has begun selling its majority stake.

The bank had hoped to complete a restructuring agreed with the European Union in 2015, two years ahead of schedule, and resume dividend payments.

The move would have also paved the way for the state to further reduce its stake and recoup more of the 22.5 billion euros it injected when the bank collapsed in 2012, less than a year after going public.

But a report released on Thursday, commissioned by the Spanish high court and prepared by two Bank of Spain experts, has cast a shadow over the plan.

The document showed the bank presented a series of error-strewn accounts for the year it listed its shares, fuelling the hopes of investors including hundreds of thousands of private punters that they could eventually get their money back.

Shares in Bankia, which raised about 3 billion euros in the listing, were down 1.7 percent at 1.3 euros by 1322 GMT, having lost 6 percent on Thursday.

A source close to Bankia said the bank would have to deal with uncertainty over if and when it would have to pay back money to shareholders, but its strategic plan would not be derailed by the matter.

"The plan has been designed taking into account potential court setbacks and even a worst-case scenario of having to pay back 3 billion euros could be withstood. In that case, it would also remain to be seen who pays ... Bankia or the state," said the source.

Some analysts played down the risk of a hit worth a fifth of the lender's 15 billion euros stock market value, noting a final ruling on the case could be months away and would not necessarily hold Bankia liable. But they said the threat was enough to weigh on the stock for some time.

The state, which bought its stake at 1.35 euros per share, is unlikely to sell more of its holding until the shares recover substantially. A senior source with direct knowledge of the matter said the government would wait until it reaches 1.60 euros.

(Editing by Sarah White and David Holmes)

By Julien Toyer