Texas Governor Rick Perry, a potential 2016 Republican presidential candidate, is vowing to fight charges he abused his power, calling the indictment a politically-motivated “farce”.

A state grand jury in Austin indicted Perry on two felony charges on Friday for his alleged threat to veto $US7.5 million ($A8.11 million) in funding to an anti-corruption unit run by Travis County District Attorney Rosemary Lehmberg, a Democrat.

After Lehmberg was convicted of drunken driving, Perry threatened to withhold the funding if she did not step down.

When Lehmberg refused to leave office, Perry carried out his veto, but it is the apparent threat that has landed him in hot water.

Perry denied any wrongdoing on Saturday, calling the indictment itself an “abuse of power” and vowing to fight “this farce of a prosecution”.

“I exercised this authority to veto funding for an office whose leadership had lost the public’s confidence by acting inappropriately and unethically,” he told reporters.

“I wholeheartedly and unequivocally stand behind my veto, and I’ll continue to defend this lawful action of my executive authority.

“I intend to fight against those who would erode our state’s constitution and laws, purely for political purposes, and I intend to win.”

Lehmberg declined to comment on the indictment, which immediately triggered calls by rival Democrats for Perry to quit.

“We call on Governor Perry to immediately step down from office,” Texas Democratic Party Chairman Gilberto Hinojosa said shortly after the indictment.

“Texans deserve real leadership and this is unbecoming of our governor.”

Perry, the longest serving governor in Texas history, took office in 2000 and is due to end his term this year.

He vowed to serve out his full term, despite the latest scandal.

But the investigation and the indictment could ruin his chances for a 2016 White House bid, following his failed attempt in 2012.