By Mahmoud Harby
KUWAIT (Reuters) - Kuwait's cabinet submitted its resignation to the Gulf state's ruler on Monday in a move some parliamentarians believe could be a first step out of the latest crisis that has stalled legislation and blocked reforms in the major oil producer.
The government's resignation came days after a top court annulled a February parliamentary election that gave the Islamist-led opposition a majority, ruling that a previous more government-friendly assembly should replace it instead.
The current government took its oath of office in front of the dissolved parliament, meaning its activities had technically become unconstitutional.
The cabinet resigned "in order to complete all the constitutional procedures for implementing the constitutional court decision," Information Minister Sheikh Mohammad al-Mubarak al-Sabah told a news conference.
"Our aim is to establish correct constitutional principles so there are no reasons for future legal challenges," he said, adding the next step, if the ruler accepted the government's resignation, was to appoint a prime minister who would form a new cabinet.
The latest twist in Kuwait's political crisis could prove positive in the long run, said Saleh Ashour, a member of parliament reinstated by the court ruling.
"The resignation of the government could be one way out of the crisis," he said.
A newly formed cabinet could take an oath of office at the reinstated parliament, then resign, paving the way for fresh parliamentary elections, Ashour said. The last such elections in the U.S. ally were in February.
Analysts said any new elections were likely to be held after the Muslim Holy Month of Ramadan, which starts either on July 19 or 20, depending on the moon sighting.
The court ruling, which came only two days after the emir suspended parliament for a month to avert a looming crisis, was rejected by the opposition as a "coup against the constitution".
At a meeting led by Ahmed al-Saadoun, the speaker of the assembly elected in February, the opposition called for Kuwaitis to take to the streets to block attempts to reconvene the more pro-government parliament.
"Under these circumstances, we cannot but call on the Kuwaiti people to express its rejection of these practices and to shoulder its national responsibility to defend its constitutional gains," the statement, signed by 35 opposition politicians, said.
Political parties are banned in Kuwait so MPs try to form blocs instead.
"We will not stop these demands until things are restored to normalcy," Saadoun, an influential political figure, told followers after the meeting.
Kuwait has long been convulsed by political crises, usually caused by bickering between an elected parliament and governments appointed by the prime minister, who is hand-picked by the emir.
The country has had eight governments in six years amid political upheaval which has prevented any major economic reforms in the OPEC member state, which needs to diversify its economy away from oil according to policymakers.
Analysts say a struggle over opposition demands for reforms that would make the Gulf Arab state a full parliamentary democracy - with governments chosen by the majority blocs in the assembly - is at the heart of the crisis.
Last week, politicians from the outgoing assembly raised the stakes in their standoff with the government, which is dominated by the ruling al-Sabah family, when they said that a "full parliamentary system" had become a necessity.
The politicians have been pushing for an elected government to loosen the al-Sabah family's grip on power in Kuwait, where thousands of U.S. troops are stationed.
Kuwait has not seen the kind of mass popular protests that forced four Arab heads of state out of office since last year.
But there were regular demonstrations last year, including one in November in which hundreds of angry men stormed parliament to press for the sacking of the prime minister amid allegations of corruption, which he denied.
The emir, Sheikh Sabah al-Ahmad al-Sabah, later sacked the prime minister, his nephew, and dissolved parliament.
The storming of the parliament triggered a criminal investigation in which 68 people, including nine MPs, were indicted on charges including attacking police officers.
A Kuwaiti court, which began hearing the case on Monday, decided that eight MPs from the previous assembly still enjoy parliamentary immunity and could not be tried.
(Additional reporting by Rania El Gamal in Dubai, Writing by Sami Aboudi; Editing by Sylvia Westall and Andrew Osborn)