Turkish court rules against closing AK Party

The verdict ended months of political uncertainty which has hit Turkey's financial markets on fears that the democratically elected party would be closed down, halting economic and political reforms needed for Turkey to join the European Union.

Constitutional Court Chairman Haşim Kılıç, the chief justice, said 6 judges voted to close the AK Party -- one fewer than the number required. But the court did decide to cut some  state aid to the party, which like other parties in parliament receives funds from the treasury.

The AK Party was re-elected with 47 percent of the vote last year and denied charges of violating the secular constitution by supporting Islamist activities.

Financial markets had traded higher on expectations the party would not be banned. The lira was up 2 percent earlier in the day and stocks had gained 6 percent.

The prosecutor had charged the Islamist-rooted AK Party with engaging in anti-secular activities and wanted the party to be banned and leading figures, including Prime Minister Tayyip Erdoğan and President Abdullah Gül, barred from politics for five years.

Turkey's government has long been at odds with the secularist establishment, including the judiciary and the military, over the role of religion in the officially secular but predominantly Muslim country. Critics said the court case was a  judicial coup  against a democratically elected party.

The European Union, which Turkey hopes to join, has also criticised the case, saying the kind of charges raised by the prosecutor should be debated in parliament and decided through the ballot box, not in the courtroom.

The court case was as much a power struggle between two competing elites for control of key institutions as an argument over whether modern Turkey's strict founding principles are out of date.

Turkey's elite has long controlled the direction the country has taken by defending the strict set of secular principles on which the country was founded in 1923.

More than 20 political parties have been banned for Islamist or Kurdish separatist activities over the years, including the predecessor of the AK Party as recently as 2001, but none has been as popular as this governing party.

If the party had been closed down and leading members banned from politics, as called for by the prosecutor, Turkey would probably have had an early parliamentary election.