The role of Turkey's governing party in promoting European Union membership proves the party is not anti-secular, a party leader said Thursday, a day after a court decided not to ban it on grounds that it was trying to impose Islamic rule.

The Constitutional Court, however, said it was delivering a strong warning to the Justice and Development Party and cut off millions in state aid to the party, which is locked in a power struggle with the secular elite.

"We are the party that has contributed the most to Turkey's European Union membership goal," deputy party leader Sadullah Ergin told CNN-Turk television. "We have worked day and night for it. How can we be the focal point of anti-secular activity?"

Ergin added: "We did not deserve to be deprived of half of the treasury funding."

The court's decision averted political and economic chaos for the country that is vying for EU membership and came as a reprieve for Prime Minister Recep Tayyip Erdogan and his allies.

A ban would have severely damaged Turkey's image as a democracy because the governing party won a landslide in elections last year. EU leaders had said the party's fate should be decided by voters, not judges.

The case was the latest episode in the battle between Erdogan's government, which has its roots in Turkey's Islamic movement, and secularists backed by the military and the judiciary who consider themselves protectors of the secular system introduced by modern Turkey's founder, Mustafa Kemal Ataturk.

With the uncertainties posed by the closure case over, the benchmark IMKB-100 stock market index rose 2.1 percent Thursday. The lira rose against the U.S. dollar to 1.16, up from 1.20 two days earlier.

Parliament agreed to go on summer recess Aug 1.

Many expressed relief at the ruling and urged Turkey to press ahead with EU-backed reforms that have been delayed partly because of the political strife and partly from Turkish skepticism about the need for changes.

The decision "not to close down the ruling Justice and Development Party has averted a political crisis in Turkey," said Emma Sinclair-Webb, Turkey researcher for New York-based Human Rights Watch. "The ruling party should honor its election promises now and revive the long-stalled reform of human rights in Turkey."

In March, Turkey's chief prosecutor asked the Constitutional Court to disband Erdogan's party and bar him and 70 other party members from joining any other political party for five years. President Abdullah Gul was also on the prosecutor's list.

The prosecutor cited as evidence, among other things, the party's attempt to lift a decades-old ban on the wearing of head scarves at universities as proof that it was trying to scrap secularism. The top court had overturned that measure, saying it was anti-secularist.

In an interview with private NTV television, Deputy Prime Minister Cemil Cicek signaled that the government was dropping the head scarf issue from its agenda.