By Olivia Kumwenda-Mtambo and Tanisha Heiberg
JOHANNESBURG (Reuters) - A South African High Court ruled on Friday that it could not compel President Jacob Zuma to set up a commission of inquiry into alleged influence-peddling in his government.
The opposition Democratic Alliance (DA) had asked the court to force Zuma to establish a commission based on a report last year by an anti-graft watchdog into allegations that businessman brothers Ajay, Atul and Rajesh Gupta had influenced the appointment of ministers.
Zuma and the Gupta brothers have denied the accusations.
The president has challenged the report in court, arguing that the Public Protector had no right to ask him to form such a commission, as this was the president's prerogative.
"To compel the President at this stage will not only be tantamount to denying the hearing or his day in court, but it will also be understood to mean the Public Protector's powers are unassailable irrespective of the content of the decision, that cannot be correct," Pretoria High Court Judge Motsamai Makume said.
"It will be in the best interests of justice to grant the President a stay of the implementation of the remedial action pending a decision of the review application."
New allegations of inappropriate collusion between state-owned companies and the Gupta brothers have put more pressure on Zuma and ministers close to him.
But the ruling was a boost for the scandal-plagued Zuma at a difficult time.
Allegations of widespread corruption and the raiding of taxpayer funds by outside interests -- known locally as 'state capture' -- have dented investor confidence in an economy which fell into a recession earlier in 2017.
On Wednesday, thousands of South Africans marched in anti-corruption protests in a rallying cry against Zuma and his powerful allies three months before a new African National Congress leader is chosen.
Zuma also survived a no-confidence vote in parliament in August but he lost the support of a number of ANC MPs, showing deep divisions within the party that has ruled South Africa since the end of apartheid in 1994.
The DA said it had noted the ruling "with interest", saying it approached the court to avoid delays in probing influence-peddling allegations.
"On a number of occasions, including before the National Assembly, President Zuma has stated that he will establish a Commission of Inquiry. To date, he has not done so," the party's federal council chairman James Selfe said in a statement.
"This matter has not been dismissed but has in fact been held back pending the outcome of the President's review application, which will be heard at the end of October, where we will also be in court to continue this fight for accountability."
Some analysts said the legal battles would prolong probes into influence-peddling allegations.
"The court had its legal duties to perform, and this is going to allow Zuma not to perform his political duties," NKC African Economics analyst Gary van Staden said.
"Ultimately its negative for "state capture". It's not going to bring any finality to what's been going on."
(Editing by Angus MacSwan)