Turkey's top court has ruled against banning the governing AK party for Islamist activities.
However the court decided to impose partial financial penalties on the party, chief judge Hasim Kilic said.
The verdict is set to ease months of political uncertainty that has battered Turkey's financial markets over fears that the democratically elected party would be closed down.
The Constitutional Court narrowly rejected the demand to outlaw the Islamist-rooted ruling party for undermining secularism.
Five of the 11 judges voted in favour of closing down the Justice and Development Party, falling two votes short of the required majority, court president Hasim Kilic said.
But he added that the court was still sending the party a 'serious warning' by cutting half of the treasury funds it was entitled to this year.
