The decision by Turkey's top court to shut down the pro-Kurdish Democratic Society Party (DTP) will fuel political instability in Turkey and undermine government moves to boost the rights of minority Kurds. Prime Minister Tayyip Erdogan has gambled on promoting Kurdish rights to end a 25-year-old conflict with rebels. More than 40,000 people have been killed in the violence. The verdict will inject a fresh element of uncertainty into Turkish markets, but hardened by years of political upheaval, investors may take the verdict in their stride. The DTP, the only pro-Kurdish party in parliament, was banned because of its connections with the Kurdistan Workers Party (PKK) guerrilla group, Constitutional Court Chairman Hasim Kilic told reporters, announcing the verdict. The PKK is viewed as a terrorist group by Turkey, the United States and the European Union. Political instability DTP Chairman Ahmet Turk has signalled the party's 21 MPs will resign in the case of a ban, raising the possibility of by-elections. Under the constitution, by-elections must be held within three months if 28 seats become vacant. Six seats are already empty, meaning only one more would need to be vacated. However, parliament must first accept their resignations before the election process can be launched. Prime Minister Erdogan has said there will not be an early general election, but it is unclear whether moves for by-elections will affect his view. His ruling AK Party, which narrowly escaped a ban in 2008 over allegations of anti-secular activities, holds a majority of 338 deputies in the 550-seat assembly. The ban will embolden nationalist parties fiercely opposed to government moves to broaden Kurdish rights. Potential conflict The DTP commands strong support in the mainly Kurdish southeast, controlling nearly 100 municipalities, and it is unclear who its supporters will back if the party is closed. They could turn to the Peace and Democracy Party (BDP), formed in 2008 by former DTP members after the party closure case was opened. A loss of faith in the democratic process could result in violent protests and increase sympathy for the PKK. Tension leading up to the verdict has already left two people dead. A PKK group gunned down seven soldiers in an ambush on their patrol in northern Turkey earlier this month. Kurdish reforms jeopardized The court's decision will damage Erdogan's initiative to broaden the rights of minority Kurds, who make up around 20 percent of the population. The reforms have so far focused on cultural issues such as Kurdish language broadcasting, university courses and the official acceptance of Kurdish place names. While reforms may continue they could lose momentum if Kurds are further alienated by the ban on the DTP. The DTP has called for far-reaching reforms including a measure of autonomy for the mainly Kurdish southeast.