Iraq's top court on Monday declared the Kurdish north's independence referendum in September to be unconstitutional, firing a new salvo in the political crisis with the autonomous region.

The legal move marked the latest stage in the dispute between Baghdad and Kurdish regional capital Arbil sparked by the referendum, which resulted in a resounding "yes" vote for independence in the Kurdish area.

A statement said the Supreme Court "rendered a decision declaring unconstitutional the referendum held on September 25, 2017 in Iraqi Kurdistan... and cancelling all the consequences and results".

Last week, as the deadline announced by the court for its decision on the constitutionality of the referendum approached, the Kurdistan government said it "respected" the decisions taken by Iraq's highest court.

It also said it respected a previous decision on Article 1 in the constitution insisting on Iraqi unity, which could be a basis for dialogue.

On Monday, the court again cited this article in its ruling, saying that the holding of the Kurdish independence referendum "contradicts and contravenes it", its spokesman Ayas al-Samuk said in the statement.

Parliament in Baghdad is currently reviewing the federal budget for the coming year, including the allocation for the Kurdish region.

There was no immediate response to Monday's ruling from the Kurdish authorities.

But Abdel Salam Barwari, a former deputy and member of former Kurdish leader Massud Barzani's Kurdistan Democratic Party, denounced it.

- 'A predictable decision' -

"It was a predictable decision given the past of this court and the fact that it has now become a political tool," he told AFP.

Last month, the UN Security Council urged the Iraqi government and regional leaders in Kurdistan to set a timetable for talks to end the crisis.

The world body's appeal came after Baghdad dismissed an offer from Iraqi Kurdish leaders to freeze the outcome of the referendum and hold talks.

Rejecting the freeze offer, Iraqi Prime Minister Haider al-Abadi instead demanded the annulment of the independence vote.

September's referendum was initiated by Barzani, for whom the repercussions were severe.

At the end of October he announced he was stepping aside, having lost almost all of the territory disputed between Arbil and Baghdad.

On October 16, Iraqi government and paramilitary forces had moved in to take over all of the disputed areas.

Under the constitution, these areas come under the central government in Baghdad, with their status to be discussed in future negotiations.

The Kurds also lost all of the oil resources in Kirkuk province that could have ensured the viability of a hypothetical Kurdish state.

Since the US-led invasion of Iraq in 2003 and in the wake of the chaos created in 2014 by a sweeping Islamic State group offensive, Kurdish peshmerga forces had filled a security vacuum in the north.

But in the space of just two weeks, Baghdad retook control of almost all of these areas with the aim of returning to the "blue line" of 2003, limiting Iraqi Kurdistan to the three northern provinces of Dohuk, Arbil and Sulaimaniyah.

The two sides also took part in a tit-for-tat wave of arrest warrants aimed at respective political and military figures.

The Kurds issued warrants for 11 Iraqi figures, and a Baghdad court did the same for the organisers of the referendum and the vice-president of Iraqi Kurdistan.

The crisis with the Kurdish areas came with Baghdad also battling to rid the country of the remnants of the jihadist fighters who had dug in after their lightning campaign three years ago swept across swathes of neighbouring Syria and Iraq.