Pakistan's top court disqualified Prime Minister Yousuf Raza Gilani from office on Tuesday in a stunning move likened to a 'judicial coup' that plunged the country into fresh turmoil.

The Supreme Court convicted Gilani of contempt on April 26 for refusing to ask Switzerland to reopen multi-million-dollar graft cases against President Asif Ali Zardari, the culmination of a showdown between the judiciary and the government.

The move exacerbates uncertainty in a country that is increasingly trying US patience over Al-Qaeda-linked havens, struggling with a Taliban insurgency and heading deeper towards a financial crisis that could force it back to the IMF.

It dissolves the cabinet and threatens to bring elections forward to later this year if the Pakistan People's Party (PPP) and its fractious coalition members fail to agree on a replacement prime minister.

"Yousuf Raza Gilani has become disqualified from being member of the parliament," said the order read by chief justice Iftikhar Muhammad Chaudhry.

"He has also ceased to be the prime minister of Pakistan with effect from the same date (April 26)," it said.

It added that 'the president of Pakistan is required to take necessary steps under the constitution to ensure continuation of the democratic process'.

Just hours later, Pakistan's election commission issued a formal notice disqualifying Gilani as a member of parliament, backdating the disqualification to the date of his conviction.

Senior PPP members appealed for calm, a sign that the party would perhaps prefer to elect a new prime minister than contest the court ruling.

"Though we have reservations about this judgement, we will take advice from the allied parties and legal experts and will then chalk out a strategy," Information Minister Qamar Zaman Kaira told reporters.

Gilani, Pakistan's first sitting prime minister to be convicted, has long refused to resign and insisted that only parliament can remove him from office.

Asked whether the PPP was considering a presidential pardon for Gilani, Kaira said 'no such suggestion is under consideration' and acknowledged that 'technically after the court order, Gilani is no longer prime minister'.

Legal complainants in the process said the ruling also rendered invalid any decision taken by Gilani since April 26.

Analysts said the PPP could easily choose a new prime minister, but warned it would be impossible to get parliament to overturn the court's decision without the support of the main opposition PML-N party.

"This is a destabilising move. It is a kind of judicial coup. First the military used to carry out coups and now it's the judiciary which has overthrown a prime minister," said political analyst Hasan Askari.

The judiciary, fronted by the popular, anti-corruption campaigning chief justice, is on a collision course with the PPP administration, which waited until March 2009 to restore independent judges sacked under military rule.

Members of the government have accused the court of trying to bring down Gilani and Zardari before February 2013, when the administration would become the first in Pakistan to complete a full five-year term.

Chaudhry's reputation was dented this month by allegations that his son accepted payments worth $3.6 million from a property tycoon in a failed effort to sway the outcome of court cases.

Neither will the government-judiciary confrontation ease with the election of a new premier, who will also face demands to reopen the Swiss cases, Askari said.

Under Pakistan's constitution, anyone convicted of defaming or ridiculing the judiciary is barred from being an MP.

The Supreme Court acted on a petition brought by opposition politicians, including cricket legend Imran Khan and PML-N leader, former prime minister Nawaz Sharif, after the PPP speaker of parliament, Fehmida Mirza, decided not to refer Gilani for disqualification.

PML-N spokesman Siddiqul Farooq reiterated a call for early elections to allow 'a newly mandated government to lead the country out of quagmire'.

The cases against Zardari date to the 1990s, when he and his late wife, former premier Benazir Bhutto, are suspected of using Swiss banks to launder $12 million allegedly paid in bribes by companies seeking customs contracts.

The Swiss shelved the cases in 2008 when Zardari became president.

Gilani has always insisted Zardari has full immunity as head of state and that writing to the Swiss would be a violation of Pakistan's constitution.