Israeli police questioned the wife of Prime Minister Benjamin Netanyahu on Thursday over allegations that the couple used public funds to cover their personal outgoings, local media reported.

"New information has reached the police according to which there is a growing evidentiary basis on which to prosecute Mrs Netanyahu," Israeli public radio reported.

It said several hours of questioning were carried out under caution at the national police fraud squad headquarters near Tel Aviv.

Media in May said police recommended charging Sara Netanyahu, but not her husband, in what is widely referred to as the "prime minister's residences affair."

"The file was passed to the Jerusalem District Prosecutor's office in April, which in turn passed it back for completion of the investigation by the police," the daily Haaretz wrote on Thursday.   

Contacted by AFP, a police spokeswoman would neither confirm nor deny Thursday's reported interrogation. The prime minister's office had no immediate comment.

Sara Netanyahu was grilled in December 2015 over claims the couple billed the state for the cost of garden furniture and electrical repairs at their private villa in the exclusive coastal resort of Caesarea.

Thursday's reports say the inquiry also covers the alleged billing of the prime minister's office for hiring private chefs and caterers for family events at the premier's official Jerusalem residence.

They said police were looking into claims that Sara used government funds to cover the cost of a live-in carer for her ailing father, now dead.  

A former butler has also accused Sara Netanyahu of pocketing cash from deposit refunds for empty bottles returned from the official residence between 2009 and 2013, money that should have gone to the treasury.

In 2013, Netanyahu reimbursed the state $1,000 but the butler has said the figure should have been six times higher.

The Netanyahus have dismissed the allegations, widely circulated in the local media, as a smear campaign.