KUWAIT (Reuters) - A Kuwaiti appeals court on Monday overturned a five-year jail sentence given to an opposition politician convicted of insulting the ruling emir in a speech, a defense lawyer said.

Under Kuwait's legal system, Musallam al-Barrak could still receive another sentence. The case will continue at the appeals court next month, lawyer Mohammed Abdel Kadr al-Jassim said.

A former member of parliament, Barrak has been out on bail since he was sentenced in April.

He was found guilty by a court of insulting Sheikh Sabah al-Ahmed al-Sabah at a rally in October in which he urged the emir to avoid "autocratic rule".

Unrest flared in Kuwait, a U.S. ally and oil producer, last year after the emir changed the electoral law before a parliamentary election in December. Barrak and other opposition said the move was meant to deny them a majority and they boycotted the poll.

The emir said he made the changes to ensure Kuwait's security and stability. The government said the voting rules helped bring the electoral system in line with those used in other countries.

Barrak, who draws support from some of Kuwait's powerful tribes, has emerged as a quasi-opposition leader in a country where formal political parties are banned. His arrest and conviction triggered a series of street protests.

While Kuwait allows more freedom of speech and political dissent than other Gulf Arab states, the emir has the last say in state affairs. He is shielded from public criticism by the penal code.

(Reporting by Sylvia Westall; Editing by Yara Bayoumy and Angus MacSwan)