By Ece Toksabay and Burcu Karakas

ANKARA A dispute between two top courts over the case of jailed parliamentary deputy Can Atalay triggered concerns about the rule of law in Turkey on Thursday, with the MP's lawyer describing an appeals court move as a "judicial coup attempt".

The top appeals court, or Yargitay, took the unprecedented step of making a criminal complaint against Constitutional Court judges on Wednesday, arguing that their ruling last month in favour of releasing Atalay was unconstitutional.

The row coincided with the European Commission's release of its annual report on Turkey's long-stalled EU membership bid, criticising its "serious backsliding" on democratic standards, the rule of law, human rights and judicial independence.

Atalay, 47, was sentenced to 18 years in prison last year after being convicted of trying to overthrow the government by organising nationwide protests in 2013, along with Turkish philanthropist Osman Kavala and six others.

All defendants denied the charges regarding the protests, which they said developed spontaneously in what was the biggest popular challenge to President Tayyip Erdogan in his two decades in power.

"The Court of Cassation has committed a crime by not recognising the Constitutional Court decision. This is a judicial coup attempt," said Atalay's lawyer Ozgur Urfa.

He called for compliance with the Constitutional Court ruling and said the Yargitay appeals court judges should be put under investigation.

However, Erdogan chief adviser Mehmet Ucum defended the Yargitay move.

"The Constitutional Court continues to make unconstitutional decisions," he said on the social media platform X, formerly known as Twitter, arguing that its decisions regarding the parliamentary immunity of convicted MPs were unconstitutional.

Nacho Sanchez Amor, the European Parliament's Turkey rapporteur, voiced unease about the dispute.

"It opens an unprecedented institutional crisis and confirms all concerns about Turkish judiciary expressed for years by the Council of Europe and the European Union," Amor said on X.

The judicial clash comes at a time when the country is seeking to woo foreign investors after a U-turn in economic policy towards greater orthodoxy since May elections.

Turkey's economy czar Mehmet Simsek and Central Bank Governor Hafize Gaye Erkan have been holding investor meetings in both Western capitals and the Middle East.

(Writing by Ece Toksabay; Editing by Daren Butler and Alex Richardson)