The constitutional court's verdict came as a welcome relief throughout Turkey and in the Europe Union, which had indicated that Turkey's membership bid to the EU would be threatened if its political struggle spiraled out of control – something that could have easily happened if the court had banned the party.

The ban had been requested by Turkey's state prosecutor, who had also asked that Prime Minister Recep Tayyip Erdogan, President Abdullah Gul, and 69 other AKP leaders be barred from party politics for five years, on the grounds that the group was injecting Islamic principles and thereby violating the country's strict 85-year-old secular system.

The prosecutor's key argument was the passing of legislation, sponsored by the AKP, that revoked a ban on Muslim headscarves in universities, which the constitutional court in June had overturned in a separate case.

Erdogan's party, however, saw the court case as an attempted "judicial coup" against his government and as part of a series of measures taken by the powerful secular forces – which dominate the military, judiciary and academia – that sought to topple the party that had won an overwhelming re-election victory in 2007.

Erdogan welcomed the ruling as a victory for democracy, reiterating that his party "has never been a focal point of anti-secular activities and will continue to defend the basic principles of the republic."

But apparently realizing that it was a close call and hardly a victory, the prime minister stressed that he would step up efforts to heal political divisions, saying that the AKP would closely study the verdict.

Ten members of the highest court concurred that the ruling party was involved in anti-secular activities and was seeking to push a religious agenda. They only differed on the punishment and the fate of the party, whose bulk of its members hail from Islamist parties that the same court had previously shut down.

While the panel of judges decided there were not enough grounds to outlaw it, the court gave the AKP a slap on the wrist by cutting by half state funds to it, sending a message that the group would closely remain under the judiciary's scrutiny for any moves deemed religious.

Six of the 11 judges had apparently voted in favor of banning the AKP, just one short of the seven needed to impose a closure, according to court chairman Hasim Kilic when he announced the ruling Wednesday.

Kilic said the decision to cut state funding to the party should be a "serious warning" to the AKP, adding, "I hope the party in question will get the message it should get."

That leaves the ball in the party and government's court on whether it would take a different path or at least water down its policies that the secular forces find provocative, analysts say.

Turkish commentators say they expect Erdogan to extend a hand of reconciliation to his secular rivals at home to reduce tensions that have brought the country dangerously close to the edge of political and economic collapse, let alone threaten the great strides that the government had made in its negotiations to join the EU.

They argue that while the court decision prevents the country from slipping deeper into turmoil, the crisis is not over. Yet, it provides an opening for Erdogan to take the lead in solving the core issues that have polarized Turkey since the AKP first came to power in 2002.

Some predicted that the prime minister may make changes to the party's leadership and cabinet lineup as a start toward gaining the trust of his adversaries by removing members the secular forces consider too "radical."

Commentators suggest confidence building measures and consultations with the opposition on developing joint policies that would improve Turkey's chances of joining the EU, such as constitutional amendments that would pave the way for reforms like restricting conditions for party closures.

The EU has been calling for judicial reforms that would forbid the banning of political parties unless they resort to violence or terrorism.

Thus, the constitutional court, which has shut down 24 parties since its establishment 45 years ago, also escaped the disapproval of the Europeans, who received the verdict with relief.

Analysts say that if Erdogan has learned from the lessons that led the country into turmoil, he will quickly begin to mend fences with the secular forces to give his government space to enact the reforms he has promised Turkey and the European Union.