Turkey's highest court on Wednesday rejected an attempt to shut down the governing AK Party but imposed financial penalties on it for anti-secular activities.
The Party's annual state aid from the treasury, which amounted to 47 million lira last year, Is expected to be cut in half following the ruling.
The verdict ended months of political uncertainty over fears the party would be closed down, halting economic and political reforms needed for Turkey to join the European Union.
Constitutional Court president Hasim Kilic said the financial sanctions imposed on the AKP were a "serious warning".
He said the court had found the party guilty of anti-secular activities, but they not serious enough actions to merit it being shut down.
At least seven of the 11 court judges would need to vote in favour for the party to be banned. But six judges wanted a ban and five did not want to do so.
At least seven judges had to vote in favour of closure to carry the case.
The BBC reports the court case followed a series of confrontations between the AKP, which has Islamist roots, and the secular elite.
Last month the constitutional court said a move to allow Islamic headscarves to be worn at universities violated the secular constitution.
More than 20 political parties have been banned for Islamist or Kurdish separatist activities over the years.