Iraq's highest court on Monday overturned controversial term limits on senior posts, clearing the way for Prime Minister Nuri al-Maliki to chase a third term in elections next year.

The decision, confirmed by multiple MPs and officials, comes with parliament considering a new election law ahead of legislative polls due to be held in April, Iraq's first general election since 2010.

The federal supreme court ruled that because the law passed by MPs in January originated in parliament, it was unconstitutional, based on previous judicial rulings that have argued laws must be first proposed by Iraq's cabinet.

"This should have come from the cabinet or the presidency only, not from parliament," said Ali Shlah, an MP from Maliki's State of Law alliance.

The decision was confirmed by Shlah, another MP and two officials.

MPs voted in January to adopt a measure to limit the president, premier and parliament speaker to two terms, but Maliki's supporters insisted at the time that the motion was not legally-binding and would be struck down in the courts.

Iraq's constitution does not set term limits for those posts.

Maliki told AFP in a February 2011 interview, however, that he would not seek a third term in office, and said at the time that he wanted to pass a constitutional provision limiting his successors to two tems as prime minister.

The Sunni-backed Iraqiya bloc, the main Kurdish alliance and the movement loyal to powerful Shiite cleric Moqtada al-Sadr -- all members of Maliki's national unity government who frequently criticise him in public -- were the law's principal parliamentary backers when it was approved earlier this year.

The move to limit Maliki's time in power came after his opponents failed last year to push a motion of no confidence through parliament.

The battle over term limits is the latest salvo in an ongoing political crisis that has meant no significant legislation has been passed since March 2010 elections.