By Lizbeth Diaz and Miguel Gutierrez
MEXICO CITY, March 4 (Reuters) - A judge on Monday ruled there was enough evidence to prosecute the charismatic former boss of Mexico's teachers' union for allegedly embezzling around $200 million in union funds, and ordered her to remain in jail ahead of her trial.
Alejandro Caballero Vertiz, Mexico city's sixth federal court judge, said in a statement on Monday night that evidence of misuse of funds by Elba Esther Gordillo, 68, was strong enough to merit trial and continued incarceration.
"The evidence considered so far is sufficient," he said in a statement, adding Gordillo and her associates "allegedly transferred money from various bank accounts in the name of the National Union of Education Workers to personal accounts between 2009 and 2012."
Gordillo faces up to 30 years in prison if convicted. Under Mexican law, she could apply for a move from jail to house arrest when she turns 70.
Gordillo has publicly denied the allegations of corruption leveled against her in previous interviews, and said in 2002 her wealth came from an inheritance from a grandfather.
One of her lawyers declined to comment to Reuters on Monday.
Gordillo, called "La maestra" or the teacher, was arrested on Tuesday a day after President Enrique Pena Nieto signed a new law aimed at jumpstarting Mexico's flagging education system by breaking the union's stranglehold over teacher hiring.
She is accused of using ill-gotten funds to pay for millions of dollars worth of U.S. property, luxury goods, designer clothes, works of art and plastic surgery, though the government said she declared annual income of just above $100,000 between 2009-2012.
Pena Nieto has pledged to put an end to the corruption that long plagued the reputation of his ruling Institutional Revolutionary Party, or PRI.
Political analysts view the move as a warning shot to any corrupt union bosses or politicians.
But it has also raised fears the PRI could be returning to a past practice of cracking down on dissent as it seeks to push through a raft of economic reforms, from a revamp of state-owned oil giant Pemex to a tax overhaul.
Appointed by President Carlos Salinas in 1989 after an impoverished childhood in the southern Mexican state of Chiapas, Gordillo, an untrained teacher, rose through the union ranks to become one of the most powerful women in Mexico.
A former grandee of the ruling Institutional Revolutionary Party, or PRI, she became more vulnerable after splitting with the PRI ahead of the 2006 presidential election, when the party suffered a resounding defeat.
Both the teachers' union and her small party, the New Alliance, have kept a distance since Gordillo's surprise arrest last week. (Additional reporting by Elinor Comlay and Tomas Sarmiento; Writing by Alexandra Alper; Editing by Simon Gardner and Paul Simao)