Recep Tayyip Erdogan has been formally re-appointed chairman of Turkey's ruling Justice and Development Party (AK).

I see every obstacle as an opportunity Recep Tayyip Erdogan

The move came a day after the country's constitutional court ruled that he was not the party's leader.

Prosecutors had demanded that Mr Erdogan be stripped of his post, arguing that his conviction for sedition in 1998 made him ineligible for the chairmanship.

However, in a surprise move, the court said he could not be removed because he had resigned as a founder member of the party in October and technically no longer held the post of chairman.

Though the decision sent shock waves through the country's financial markets, the court later said that Mr Erdogan could be re-elected without hindrance.

There had been fears that the party could have been banned if he had been shown to be in breach of the law by continuing as chairman after October.

Shadow leadership

The party's decision was made hours before Mr Erdogan was due to leave for the World Economic Forum in Davos, Switzerland.

Erdogan has been criticised for shadowing Prime Minister Abdullah Gul

After his re-appointment, Mr Erdogan held up his certificate of leadership to cheers from party supporters.

"I see every obstacle as an opportunity...," he said.

"However much I praise God that I have been given a role in the struggle for democracy and freedom in this country, it is not enough."

Having led his party to an election landslide last year, Mr Erdogan was banned from becoming prime minister because of his conviction.

But the new Turkish parliament has already changed the constitution to allow Mr Erdogan to be elected and become prime minister.

He is expected to stand for parliament in the near future.

The BBC's Jonny Dymond in Istanbul says this should end this strange period in which he effectively shadows the leadership of Prime Minister Abdullah Gul.

Mr Erdogan has been criticised for carrying out state functions including foreign visits without holding office.